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CARING FOR THE
FUTURE
VERBUND SUSTAINABILITY REPORT 2006
THE RESPONSIBILITY GROWS
A POWER PLANT
INSIDE THE MOUNTAIN
FROM POWER PLANT
TO GREEN MEADOW
COMPETITION
VERSUS SECURITY
OF SUPPLY
ELECTRICITY
AND WATER
FOR SRI LANKA

SO DO WE

CONTENTS
Preface 3
Mission Statement Verbund 4
Corporate Profile Verbund 6
Regarding this report 9
Highlights 2006 10
Business Framework for Verbund 13
Hydropower – Facts and Figures 21
SELECTED SUSTAINABILITY PROJECTS:
A new power plant inside the mountain – pumped-storage power plant Limberg II 27
Construction of new hydropower plant Werfen/Pfarrwerfen 30
Pernegg steam-generating power plant – from power plant to green meadow 33
High voltage – competition versus security of supply 37
In an emergency situation you have to move fast 40
Integrated management in the grid area 42
Reduction of greenhouse gases 45
Electricity from 100 % hydropower boosts competition 46
Electricity and water for Sri Lanka 49
To see a child smile 51
RATIOS AND KEY FIGURES IN THE THREE SUSTAINABILITY AREAS:
Economic indicators 52
Environmental and research indicators 56
Social indicators 64
Management Approach 70
SUSTAINABILITY GOALS:
Primary Goals 76
Economy 76
Environment and Research 78
Social Issues 78
Auditor's Certificate 80
Group Structure Cover
Glossary Cover
Certified Power Plants of Verbund Cover
Imprint Cover

INDICATORS
ECONOMIC INDICATORS
EVA € million
04
05
06
64.5
201.8
346.4
04
05
06
ENVIRONMENTAL INDICATORS
Hydropower generation GWh
04
05
06
SOCIAL INDICATORS
Employees 3
04
05
06
24,962
24,788
23,853
Persons
2,504
2,479
2,466
Dividends per share 2
€
0.30
0.50
0.75
Thermal generation GWh
04
05
06
04
05
06
4,891
4,223
4,233
Training hours per employee hours
36.8
44.0
40.0
Productivity per employee T€
04
05
06
04
05
06
Accident rate 4
04
05
06
730.6
918.5
1,177.1
ISO 14001 – plants %
1 Following the disposal of the Eco-electricity segment. 2 The figures for previous periods were adjusted for the stock split of 23 May in the ratio of 1 : 10. 3
51.0
51.0
57.4
‰
22.8
19.8
15.4

2004 1 2005 1 2006 1
EVA € million 64.5 201.8 346.4
Dividends per share 2 € 0.30 0.50 0.75
Productivity per employee T€ 730.6 918.5 1,177.1
Sales € million 1,712.0 2,134.4 2,878.2
Earnings per share 2 € 0.76 1.13 1.63
Cash flow per share 2 € 1.42 2.21 2.45
2004 2005 2006
Generation from hydropower plants GWh 24,962 24,788 23,853
Generation from thermal plants GWh 4,891 4,223 4,233
Share of locations with EMAS audit % 23.0 23.0 28.7
Share of locations with ISO 14001 certificate % 51.0 51.0 57.4
CO 2 emissions avoided through hydropower generation Million tons 22.7 22.6 21.8
Waste t 6,896 25,224 37,740
2004 2005 2006
Number of employees 3 Persons 2,504 2,479 2,466
Training hours per employee Hours 36.8 44.0 40.0
Accident rate 4 ‰ 22.8 19.8 15.4
Share of women % 14.7 15.1 15.7
Number of years at company Years 20.0 20.5 20.6
Fluctuation rate % 1.32 0.78 0.81
3 Number of employees under labor law as of 31.12.
4 Number of notifiable accidents per 1,000 employees, adjustment of computing method 2006.

»With our hydropower plants, we are making
an important contribution to climate protection.
And we shall push ahead with our goal of
preventing and further reducing CO 2 emissions
in Austria and abroad.«
GENERAL DIRECTOR
DIPL.-ING. HANS HAIDER
Chairman of the Managing Board
DEPUTY GENERAL DIRECTOR
DR. MICHAEL PISTAUER
Deputy Chairman of the Managing Board
MANAGING DIRECTOR
DR. JOHANN SEREINIG
Member of the Managing Board
Dipl.-Ing. Hans Haider Dr. Michael Pistauer Dr. Johann Sereinig

PREFACE
DEAR READER,
You are now reading the fifth Verbund
Sustainability Report, a report which we
have once again approached with great
commitment and ambition. For more than
five years we have been working on the
presentation of sustainability aspects
within Verbund. These activities are not
only greatly appreciated by our readers but
also honored by the experts:
The Verbund Sustainability Report 2005
was awarded the Excellence Prize at the
»Austrian Annual Report Award« organized
by the business journal »trend« and,
for the third time, it won the first prize
in the category »large companies« at the
Austrian Sustainability Reporting Award
(ASRA).
Fiscal 2006 was a very successful year. Once
again, we improved the economic results of
the group. Further progress was made in
the area of environmental certification and
our new personnel development program
was very successful.
This continued development in all three
dimensions of sustainability was also honored
by the rating agencies. In the ranking
carried out by the Center for Corporate
Citizenship Austria (CCCA), which focused
on the social responsibility and commitment
of 100 of Austria’s largest compa-
nies in 2006, Verbund came 2 nd in the overall
evaluation and was ranked No. 1 within
the energy sector. In its appraisal, the
CCCA stated: »Verbund is committed to its
social responsibility and sees corporate social
responsibility as a long-term strategy
with clear economic advantages.«
GROWING SUCCESS LEADS
TO GREATER REQUIREMENTS
Verbund continues to be the driving force
for clean energy in Europe. This is exemplified
not only through the new hydropower
projects in Austria, which will be described
in detail in the following pages, but also
through the intensification of our acquisitions
and cooperations throughout Europe.
In September 2006, the Verbund joint venture
Sorgenia opened an 800 MW gas
power plant in Termoli in Southern Italy.
The construction of a second 800 MW gas
power plant in Modugno has already commenced.
Plans are already in place for the erection
of a 400 MW gas power plant in cooperation
with our subsidiary Poweo in France.
Here, our orientation towards sustainabili-
ty with a focus on ecological and social
aspects is no less important than that at
our locations in Austria.
The EU electricity market will be fully deregulated
in 2007 and further markets for
free electricity trade will open up in future.
Hence, Verbund has access to an interesting
growth market which – above all, with regard
to our management capacities – will
also prove to be very challenging.
For this reason, an internationalization
campaign, during which intensive language
courses were also offered, was started
within the group in 2006. Almost 200 employees
volunteered to take part in this
one-year training program.
This is just one example of the initiatives
and projects at Verbund which are designed
to make us fit for the future. More
details are provided in the chapter »Social
Indicators« on page 64.
We hope that you will enjoy the articles in
this year’s Sustainability Report and that
you will find our activities interesting.
And, given that communication should
be a two-way street, we look forward
to receiving your feedback via
sustain@verbund.at.
3

MISSION STATEMENT
VERBUND
VISION
As Austria’s leading
electricity company,
we also have a clear
international vision:
to be the driving
force for clean energy
in Europe.
MISSION
We are the leading
electricity company in
Austria and are growing
in the European market.
We generate electricity
in environmentally
friendly plants, primarily
from hydropower.
With the Austrian
transmission grid, we
guarantee the quality
of the power supply.
We offer all customers
optimal services through
our electricity trade and
distribution activities.
We practice sustainability,
communicate
openly and are committed
to our social
responsibility.
STRATEGY
We concentrate on
our core competencies,
namely electricity
production, electricity
trade and distribution as
well as electricity transmission.
Our primary
objective is to achieve
value-generating growth
through the adoption
of a selective investment
policy in Europe. This
growth objective is supplemented
by consistent
cost management and
the optimization of the
capital structure. Targeted
selection, optimal
deployment and ongoing
training ensure that our
employees always deliver
peak performance.
We orientate our actions
on sustainable corporate
management and always
consider the expectations
of our stakeholders.

CODE OF CONDUCT
As Austria’s largest electricity company, we
operate successfully throughout Europe.
We are aware of our liability towards our
shareholders, our employees, our business
partners, the society and the environment
and act in accordance with the following
principles:
Cooperation
The collaboration with all stakeholders is
cooperative, fair and reliable. We attach
great importance to dealing with conflicts
in a constructive manner.
Clear and open communication
We seek open and factual dialogue with
our stakeholders. We ensure that our actions
remain understandable and comprehensible.
Confidentiality
As a listed company, we are obliged to observe
the strict rules of the financial markets,
the observance of which is guaranteed
through the Compliance Officers.
Accountability
We do not tolerate any type of dishonesty
in business practice and reject all forms of
corruption (as, for example accepting or
offering bribe money). We stand for human
rights and respect the dignity of each
individual. We strictly condemn any form
of child and forced labor. We also require
our business partners to comply with such
values.
Compliance with laws and contracts
We comply with the applicable laws and
honor our agreements and contracts. We
commit ourselves to the Austrian Corporate
Governance Code as well as to the unbundling
regulations.
Employees
Qualified and motivated employees form
the basis for our success. Our employees
stand out for personal commitment, top
professional qualifications and their ability
to identify with corporate objectives and
principles.
We offer all employees individual development
opportunities and good prospects for
the future.
We strive to harmonize the working conditions
with the respective living circumstances
of the employees so as to achieve a
balanced relationship between career and
private life. By achieving this work-life
balance, we aim to secure a long-term cooperation.
Loyalty to the company is very important
to us. This also includes any constructive
criticism, which we can share within Verbund
in an appropriate and open fashion.
We work with all people regardless of their
gender, age, religion, culture, color of their
skin, education, social background, sexual
orientation or nationality. We do not tolerate
any form of discrimination, mobbing
or sexual harassment.
Leadership skills are an essential prerequisite
for the success of any company. Cornerstones
here include professional and
social competence, open and direct communication,
clear and unbureaucratic decision-making
structures, constructive criticism
and openness towards innovation.
Customers
Customer orientation is of special importance
to us. High service quality and competence,
fair market conditions and the reliable
provision of services make up our
mandate.
Suppliers
We strive to establish partnership-like business
relationships with our suppliers and
require that they observe our quality standards
and sustainability principles.
Competition
We commit ourselves to fair competition.
We reject all cartel-like agreements, in particular,
agreements on price-fixing, agreements
on market share, agreements on capacity,
carving-up of regional markets and
price controls.
Sustainability
In all our activities, we follow the principle
of sustainability – the holistic consideration
of economic success, environmental
conservation and the preservation of the
interests of the employees and society.

6
CORPORATE PROFILE
VERBUND
In fiscal 2006, the economic
result was once
again significantly improved.
This excellent
result is attributable
to the restructuring
measures that were
completed in 2005 and
the clear increase in
wholesale prices that
were realized in marketprice-indexed
contracts.
SHAREHOLDER STRUCTURE %
51
>10
>10
5
Republic of Austria EVN WIENER STADTWERKE
TIWAG Free float
In the environmental area, the Environmental
Management System in accordance
with EMAS/ISO 14001 was extended to all
power plants in the Lower Danube, Drau
and Kaprun-Salzach power plant groups.
Another achievement that should be mentioned
here is the auditing of Grid Group
West in accordance with OHSAS 18001
and EMAS/ISO 14001.
Ongoing training and further education
has been a central focus at Verbund for
many years. 86 % of our employees participated
in training measures in 2006 and the
total training investment per employee rose
by 14.2 % to € 1,220. Offering 40 training
hours per employee each year, Verbund
meets the »training week« requirement under
the collective wage agreement.
GENERATION DATA
Quantity BC1 SC2 2006
MW GWh GWh
Hydropower 87 5,832 21,674 20,836
Thermal power 9 1,850 4,233
Purchase rights for
run-of-river plants 20 590 3,030 3,017
Total 116 8,272 24,704 28,087
1 Bottleneck capacity 2 Standard capacity
GENERATION
In our 107 hydropower plants, we generate
85 % of our electricity (long-term average)
from environmentally friendly, renewable
hydropower. Our power plant park also
comprises nine thermal power plants,
which are equipped with state-of-the-art
environmental technology. Three of these
plants are operational, five are off line and
one plant is leased out. District heating is
also provided at some of the thermal
power plants.
TRANSMISSION
Our 53 substations and a line length of
3,300 km make up the largest part of the
Austrian high-voltage grid.
GRID DATA
Voltage Overhead lines Substations
level Line System
length in km length in km
380 kV 1,002.00 1,973.40 53
220 kV 1,658.60 3,309.10
110 kV 721.30 1,237.00
Total 3,381.90 6,519.50

Winkeln
CH
Run-of-river plants of AHP > 5 MW
Storage power plants of AHP
Joint-venture power plants of AHP
Participating interests of Verbund
Power plants of AHP under construction
Slavetice CZ Sokolnice
Thermal power plants of ATP
Thermal plants of ATP out of commission or leased
380 kV transmission line of APG
Pleinting
Pirach
Passau-Inglin g
Jochenstein
Aschach
Planned 380 kV transmission line of APG
220 kV transmission line of APG
Transport rights of APG on third-party lines
Substation owned by third party
Substation owned by APG
Schärding-Neuhaus
Egglfing-Obernberg
Ering-Frauenstei n
Altheim
Simbach
Braunau-Simbach
Ottensheim-Wilhering
Abwinden-Asten
St. Pantaleon
Wallsee-Mitterk.
Mühlrading
Staning
Greifenstein
Altenwörth
Korneuburg
*
)
Melk
Freudenau
Dürnrohr
Obermooweiler
Memmingen
Leupolz
Oberaufdorf-Ebbs
D
Nußdorf
Werfen/Pfarrwerfen
Garsten-St. Ulrich
Losenstei n Ybbs-Persenbeug
Großraming
Rosenau
Weyer
Ternberg
Schönau
Klaus
Altenmarkt
Landl
Salza
Dionysen
Krippau
Funsingau
Gerlos II
Gerlos
Bischofshofen
St Johann
Schwarzach .
Kreuzbergmaut Sölk
Urreiting
Triebenbach
Hieflau
Leoben
Zeltweg
Pernegg
Laufnitzdorf
Rabenstein
Pradella
Mayrhofen
Bösdornau
*
Roßhag )
St Veit Mandling
Limberg II
Wallnerau .
Häusling
Kaprun- Bodendorf-Paal
Kaprun-
*
Hauptstufe
) Oberstufe
Reißeck-Kreuzeck Malta-Oberstufe
Malta-Hauptstufe
DRAU Malta-Unterstufe
Fisching
Peggau
Graz
St Georgen Friesach
.
Weinzödl
Voitsberg Neudorf-W erndorf 2
Neudorf-Werndorf 1
Mellach
Bodendorf-Mur
Mellach
St. Martin Lebring
Arnstein
Gralla
St Andrä
Gabersdorf
.
Obervogau
I
Paternion Villach
Lavamünd
Spielfeld
5 0
3
1
0
2
0
0 4
0
5 km
0
Soverzene
Kellerberg
Rosegg-St. Jakob
Feistritz-Ludmannsdorf
Schwabeck
Podlog
Edling
Maribor
I N
N
Verbund’s power plant park and high-voltage grid
TRADING/SALES
The environmentally friendly electricity
generated at our hydropower plants in
2006 was used to provide industrial and
commercial enterprises as well as 60,000
household customers with electrical energy.
VERBUND-Austrian Power Trading AG
(APT) carries out electricity trading activities
in Europe.
SALZACH
II
NN
NN
DONAU
ENNS
Ferlach-Maria Rain
MUR
Annabrücke
Sales to foreign customers account for a
share of 66.4 % (not including eco-electricity
and own consumption). The most
important foreign markets for Verbund are
Germany, France, Italy, Hungary, Slovenia
and Greece. The most significant increases
were achieved in the German and French
markets. The subsidiaries of Verbund are
described in the Annual Report 2006.
SLO
DONAU DONAU
VERBUND IS A MEMBER OF:
SK
H
Györ
Györ
ABCSD Austrian Business Council
for Sustainable Development
B.A.U.M. Austrian Network
for Sustainable Management
E.V.A. Austrian Energy Agency
IWRA International Water
Resources Association
WEC World Energy Council
(Austrian National Committee
of the World Energy Council)
International Association on Water Quality
International ARGE Danube Research
Societas Internationalis Limnologiae
7

8
SUPERVISORY BOARD
AS OF 15 MARCH 2007
SHAREHOLDERS
DDr. Erhard Schaschl, Chairman
(up to 14.03.2007, afterwards First Deputy
Chairman), Member of the Managing
Board of ETN Vermögensverwaltung AG
Dr. Gilbert Frizberg
First Deputy Chairman
(up to 14.03.2007, afterwards Chairman),
Managing Partner in Hereschwerke
Holding GmbH
Dr. Maximilian Eiselsberg
Second Deputy Chairman
Attorney at Law
o. Univ.-Prof. Dipl.-Ing.
Dr. Günther Brauner
Chairman of the Institute for Power
Systems and Energy Economics at the
Technical University of Vienna
Dipl.-Betriebswirt Alfred Heinzel
Managing Partner in
Heinzel Holding GmbH
Dr. Burkhard Hofer
Spokesperson of the Managing
Board of EVN AG
Dr. Michael Losch
Head of Department at the Federal Ministry
for Economy and Labor, Center 1 –
Economic Policy, Innovation and Technology
Dkfm. Peter Püspök
Chairman of the Raiffeisenlandesbank
Niederösterreich-Wien AG
Dipl.-Ing. Hansjörg Tengg
Managing Director of
smart technologies GmbH
Gen.-Dir. Ing. Siegfried Wolf
General Director of
Magna Holding Europa AG
EMPLOYEE REPRESENTATIVES
Anton Aichinger, as of 25.10.2006
Chairman of the Group Works Council,
Chairman of Central Works Council
VERBUND-Austrian Hydro Power AG
Kurt Christof
Chairman of Central Works Council
VERBUND-Austrian Thermal Power
GmbH & Co KG
Harald Novak
Chairman of Central Works Council
VERBUND-Austrian Power Grid AG
Dipl.-Ing. Ingeborg Oberreiner,
as of 29.08.2006 Chairman of the Works
Council Österreichische ElektrizitätswirtschaftsAG
(Verbund)
Ing. Joachim Salamon, as of 25.10.2006
Central Works Council
VERBUND-Austrian Hydro Power AG
RETIRED
Herbert Bernold, up to 25.10.2006
Ing. Hannes Brandl, up to 25.10.2006
Ing. Johann Kratzer, up to 29.08.2006

REGARDING THIS REPORT
The Verbund Sustainability
Report provides
an overview of the
activities that are carried
out by the company
from the viewpoint of
social responsibility.
SCOPE OF THE REPORT
It embraces the activities of all companies
of the Verbund Group that are consolidated
in the group balance sheet. Important
events taking place in companies that are
not consolidated will also be described so
as to provide a complete picture of the
company. The data is collected site-specific
and is audited and certified on a number of
occasions, e.g. in accordance with ISO
14001 and EMAS. The product »Electricity
from Hydropower« is TÜV-certified.
The reporting period is always the last
completed calendar year. Special events
that take place within the group outside of
the reporting period which are of particular
public interest are also included to
guarantee up-to-dateness.
GRI STANDARD
This report was drafted in accordance with
the guidelines of the Global Reporting
Initiative (GRI) on the preparation of
sustainability reports (see also
www.globalreporting.org).
In October 2006, GRI issued new guidelines
on the drafting of sustainability reports.
When drafting these »G3 Guidelines«,
all GRI stakeholders were invited to
provide feedback on the draft guidelines.
Verbund was the only Austrian company to
become involved in this feedback process
and therefore made a contribution to the
further professionalization of the reporting
process. All of the new G3 Guidelines were
adhered to in the drafting of this report.
The GRI Index is available under
www.verbund.at>company>responsibility>
overview>basic information.
The Global Reporting guidelines are applied
to from the moment of selection of
themes for the sustainability report. The
multi-stage process commences with the
collection of the themes in the Sustainability
Committee. The Sustainability Board
evaluates these suggestions with regard to
their relevance, topicality and presence in
public discussion and suggests themes
which are most suitable for presenting the
sustainability policies of the group in the
reporting period to the Managing Board.
FURTHER DOCUMENTS
This Sustainability Report extends on the
contents of the Sustainability Reports 2002
to 2005.
To render the report easy to read, the current
projects and events are presented in a
very compact form and other data sources
are referred to for further details and background
information:
1. Basic information
Fundamental issues, which have already
been dealt with in earlier sustainability reports
but which are still of relevance, are
published on our homepage
www.verbund.at under >responsibility>
overview>basic information.
2. Economic performance
Data and activities relating to the economic
pillars of sustainability are provided in
the Annual Report 2006. They are published
under: www.verbund.at>investors>
publications>annual reports.
3. Environment and research data
Extensive data and reports for the research
and environment area can be found under:
www.verbund.at>responsibility>environment
and research.
4. Verbund publications
Details relating to individual environmental
and research projects can be found in
the Verbund publications under:
www.verbund.at>responsibility>environment
and research>research>reports.
Please note
To render the report easy to read, groups of
persons (employees, colleagues) are addressed
in a neutral form, always referring
to both male and female persons.
In the tables, differences can arise in the
addition of rounded totals and percentages
due to the utilization of EDP devices.
9

HIGHLIGHTS 2006
JANUARY
Verbund trading company in the Czech
Republic
Founding of VERBUND-Austrian Power
Trading Czech Republic s.r.o.
Joint venture and interest in French company
Poweo secured
Verbund acquires a 25 % interest in Poweo
SA, the strongest independent electricity
and gas provider in France.
FEBRUARY
Supervisory Board approves construction
of the pumped storage power plant »Limberg
II«
As a result, the output of the storage power
plant group Kaprun, which was commissioned
over 50 years ago, will be more than
doubled.
MARCH
Drinking water power plant Kolbnitz
Verbund also sets new standards in the
construction of small, but highly innovative
power plants: in the Carinthian Möll
Valley in Kolbnitz, a drinking water power
plant has now been commissioned after a
construction period of just nine months.
The plant will supply the municipality of
Reisseck with high-quality spring water instead
of treated surface water and will also
generate electricity. The plant, which has
an output of 30 kW, will generate 250,000 kWh
of eco-electricity each year. This is enough
to supply up to 100 households. The construction
costs came to € 650,000.
APRIL
Government’s security of supply package
The package provides a secure legal basis
for the congestion management activities
of VERBUND-Austrian Power Grid AG
(APG) and significantly improves the data
exchange between power plant operators
and grid operators.
MAY
Verbund stock split in ratio of 1 : 10
The stock split of Österreichische Elektrizitätswirtschafts-Aktiengesellschaft(Verbundgesellschaft)
will be carried out on 23
May in the ratio of 1 : 10. The price of the
Verbund share on the Vienna Stock
Exchange will be one-tenth of its original
value.
Joint venture in Greece
Verbund and ENERGA establish the APT
trading company VERBUND-Austrian
Power Trading ENERGA Hellas S.A.
Austrian electricity grid faces another critical
situation
Extreme wind power generation in Germany
and the failure of a line in the Czech Republic
result in heavy loads in the Austrian
high-voltage grid. Working closely with the
grid operators in the neighboring countries,
VERBUND-Austrian Power Grid AG
(APG), manages to stabilize the grid.
JUNE
StadtKraftWerk Leoben opens
The StadtKraftWerk on the Mur river commences
operation according to schedule on
27 June 2006. The new run-of-river power
plant has an investment volume of € 34
million. With an output of 9.9 MW, the
power plant, which was constructed at an
existing location over a period of two years,
will supply three times more electricity
than the old plant and will provide practically
all of the households in Leoben with
environmentally friendly Austrian energy.
Record number of visitors to Freudenau
power plant
In June 2006, 106 groups comprising a total
of 2,300 people visited Freudenau
power plant. In the last four days leading
up to the school holidays, 41 groups toured
the power plant and learned all about clean
electricity generation from hydropower.
JULY
Positive EIA decision for combined electricity-heat
power plant Mellach
The power plant project Mellach, which
will be implemented by VERBUND-Austrian
Thermal Power GmbH & Co KG
(ATP), is environmentally compatible. This
was verified by the environmental impact
analysis (EIA) that was carried out by the
provincial government of Styria for the natural
gas-fired 850 MW electricity-heat
power plant which is located to the south
of Graz. The latest technology for thermal
power plants will be used for the new
plant, which will cost € 400 million. Commissioning
is scheduled for 2009.
AUGUST
New hydropower plant Werfen-Pfarrwerfen
VERBUND-Austrian Hydro Power AG
(AHP) and Salzburg AG decide to construct
the new Salzach power plant Werfen/Pfarrwerfen.
The new power plant,
with an investment volume of € 63.5 million,
will generate 76.5 million kWh of electricity
per year from 2006. This power will
be fed into the regional electricity grid.
Sorgenia S.p.A.
(up to July 2006: Energia S.p.A.)
The Verbund holding in Italy »Energia«
changes its name to »Sorgenia«. The name
originates from the word »source« and reflects
the fact that the company will be enhancing
its focus on environmentally
friendly sources of energy in the future.
The gas power plant Termoli is commissioned
and three positive decisions are
received for the power plant projects
Modugno, Lodi and Aprilia.

SEPTEMBER
1 st place for sustainability in Verbund
In the CCCA ranking (Center for Corporate
Citizenship Austria), Verbund’s sustainability
activities take the top prize in the
category »Raw Materials and Energy«. Verbund
takes second place in the overall ranking.
Three »bronze« and one »gold« for Verbund
reports
At the »Austrian Annual Report Award«
(AAA), which is organized by the business
journal »trend«, the Verbund Annual Report
2005 is ranked No. 3 in the overall
evaluation for »Listed Companies« as well
as in the categories »Business Reporting«
and »Medium Quality«. In addition, the
Verbund Sustainability Report 2005 won
the Excellence Prize.
OCTOBER
New customer record at APS
VERBUND-Austrian Power Sales GmbH
already supplies 45,000 private households
and 150 companies with annual sales of 2
terawatt hours (2 billion kWh).
First woman on Verbund Managing
Board
On 24 October 2006, the Supervisory
Board appoints Dr. Ulrike Baumgartner-
Gabitzer as the fourth member of the Verbund
Managing Board. Dr. Baumgartner-
Gabitzer served as Secretary General of the
Austrian Association of Electricity Utilities
since 1997. As of 1 January 2007, she will
be responsible for the Grid, Legal, Procurement
and General Services areas.
NOVEMBER
Blackout prevented
Overloading in the German grid led to failures
in the European high-voltage grid
from Portugal to Poland and from Denmark
to Greece. An Austrian blackout was
prevented through the utilization of the
large storage power plants and the quick
reaction of the crisis management group at
VERBUND-Austrian Power Grid AG
(APG).
Verbund Sustainability Report takes first
place at ASRA
The Verbund Sustainability Report 2005 is
ranked No. 1 for the third time at the Austrian
Sustainability Reporting Award
ASRA.
Cooperation with the world’s second
largest hydropower producer
HydroOGK and Verbund sign a Memorandum
of Understanding relating to future
cooperation in the construction of hydropower
plants in Russia.
VERENA Prize 2005
On 16 November, within the framework of
the 3 rd Verbund Research Forum 2006, the
VERENA Prize was awarded. Dipl.-Ing.
Christoph Leitinger received the first prize
for his thesis »Utilization and Effects of
Phase-Shifting Transformers in the Transmission
Grid«.
DECEMBER
Trading record at APT
VERBUND-Austrian Power Trading AG
(APT) has tripled its trading volume in the
last five years and will sell 106 terawatt
hours (106 billion kWh) in 2006. A share
of 76 % will go to foreign customers.
Verbund secures supply
VERBUND-Austrian Power Grid AG
(APG) installs three phase-shifting transformers
in the substations Tauern, Ernsthofen
and Ternitz. This emergency measure
was necessary to ensure security of
supply in the south of Austria for the next
two to three years until the 380 kV Styria
line is complete.
Verbund and POWEO build power plant
in France
Verbund and POWEO give the go-aheadfor
work on the 412 MW steam-generating
power plant Pont-sur-Sambre in North
France.
Verbund in Turkey
Verbund and Sabanci-Holding, the leading
industrial and financial group in Turkey,
sign a cooperation agreement covering
joint activities in the Turkish electricity
market.
Verbund in Romania
Verbund sets up the subsidiary VERBUND
Romania S.R.L. in Bucharest to open up
the Romanian market.

BUSINESS
FRAMEWORK
FOR VERBUND
In fiscal 2006, Verbund
once again achieved
economic success and
further strengthened its
position as one of the
most profitable energy
utilities in Europe. At
Verbund, ecological
awareness forms a
sound basis for economic
activities: we
are the driving force
for clean energy in
Europe.
Based on its market capitalization on
31 December 2006, Verbund is ranked No. 5
among all companies listed on the Vienna
Stock Exchange and has become an energy
utility of European dimensions.
66.4 % of our electricity business is
conducted abroad. Parallel to this, Verbund
ensures the maintenance of a secure and
environmentally friendly power supply in
Austria. We operate in accordance with the
regulations applicable both at – national
and European level with the aim of achieving
profitable growth by guaranteeing security
of supply in Europe.
THE EUROPEAN ENERGY MARKET
In the coming years, the European energy
industry will face the challenge of creating
a competition-oriented, secure and efficient
energy system in a deregulated market.
Capacities in Central and Western
Europe, Southeast Europe and Turkey will
have to be expanded to meet the growing
demand for electricity. We believe that this
should be achieved through efficiency enhancement
or expansion measures at existing
plants as well as through the exploitation
of usable resources, above all in the
area of hydropower.
Existing potential can be utilized in an economically
and ecologically meaningful
manner, particularly in Turkey and the
countries in Southeast Europe, even under
observance of the strict Austrian environmental
standards. Investment in the expansion
and construction of power plants
would enable these countries to integrate
more successfully into the European elec-
13

14
tricity market and, with it, the European
economic space.
The EU has been calling for a single
electricity market for many years but the
plan has not yet become reality. Now, the
European electricity market is to be fully
opened on 1 July 2007 thus paving the way
for a functional, integrated single energy
market which will guarantee a competitive
market for the EU and enhance security of
supply. Private and industrial customers
will be able to freely select their supplier
within the EU and electricity and gas will
be traded beyond the EU borders.
A number of the EU member countries
have, however, been slow in implementing
the deregulation guidelines and, in some
cases, the guidelines have been implemented
in an inadequate manner. Hence, at the
end of 2006, Europe was still a long way off
achieving a flourishing single energy market
with transparent price formation. The
extensive analyses of the EU Commission
have shown that the European energy markets
do not yet function according to competition
rules. EU market deficits were
identified in five major areas:
Higher level of concentration in national
markets
With few exceptions, the three largest national
companies together hold a significant
share (over 75 %) of the electricity
and gas market in the respective countries.
Moreover, the large European utilities in all
member states have a growing number of
subsidiaries.
Inadequate cross-border connection capacities
Congestion is a frequent occurrence at many
borders within the EU. This poses an
obstacle to the fusion of the national markets.
In 2002, the European Council decid-
REQUIRED INVESTMENT IN THE ENERGY
INFRASTRUCTURE 2005–2030 ACCUMULATED USD billion
Investment in coal oil gas electricity Total
OECD 156 1,149 1,744 4,240 7,289
North America 80 856 1,189 1,979 4,104
Europe 34 246 417 1,680 2,376
Pacific Region 42 47 139 582 809
Transition economies 33 639 589 590 1,850
Russia 15 478 440 263 1,195
Developing countries 330 2,223 1,516 6,446 10,515
Developing Asia 298 662 457 4,847 6,264
China 238 351 124 3,007 3,720
India 38 48 55 967 1,108
Indonesia 13 49 86 187 335
Middle East 1 698 381 396 1,476
Africa 20 485 413 484 1,402
Latin America 12 378 265 719 1,374
Brazil 1 138 48 252 439
Transport, interregional 45 256 76 – 376
Worldwide 563 4,266 3,925 11,276 20,192
Note: Worldwide total includes investment of $ 161 billion in biofuels
Source: World Energy Outlook 2006 of the International Energy Agency (IEA), November 2006
ed that the member states must have connection
capacities equivalent to at least
10 % of their national consumption. This
goal has not yet been achieved.
Inadequate unbundling
The insufficient separation of generation,
distribution and grid activities is not conducive
to the promotion of equal treatment
for all market participants. Established
companies have better access to
market-relevant information than alternative
suppliers and can therefore retain their
market shares in spite of having higher
prices. Insufficient unbundling therefore
proves costly to the consumer.
Lack of transparency
Reliable and timely information on markets
is normally vital for healthy competition.
The EU strongly criticizes the poor
availability of such information.
Lack of competition
Consumers can only benefit from the
advantages of a deregulated market if they
can identify the energy prices. In
many cases, there are either no competing
offers, or available offers are not very transparent.
This is also responsible for the low
changeover rates in the private customer
segment.
The EU Commission is determined to
exert pressure on the member states to ensure
that the guidelines are implemented in
a fast and comprehensive manner and that
decisive measures for enhanced competition
in Europe are taken.
In January 2007, the Directorate General
for Competition submitted its final report
on the progress that has been made in the
single energy market. The central issues include
the ownership unbundling of grid
and production activities, the setting up of
a European regulator and the creation of a
European center for energy grids.
The privatization of generation capacities
in Southeast Europe and Turkey is soon set
to commence. This trend is attributable to

increasing pressure from the regulators and
the gradual intensification of competition.
Today, signs of an electricity price increase
in Western Europe and an adjustment of
the prices in Southeast Europe are already
evident. The privatization and market deregulation
process should lead to the creation
of a transparent, liquid and barrierfree
European energy market.
Parallel to this, another development is apparent
on the market, namely the ongoing
growth of the top players, above all
through mergers. This growth is based in
the expansion in the East and Southeast
European markets, which are currently
being opened and deregulated. Parallel to
this, there is a growing trend among the
players in the energy market to concentrate
not only on one source of energy but on
the expansion of generation capacities
both in the electricity and gas market thus
leading to a clear alignment of both markets.
Verbund takes on the challenges that are
posed by the European energy market and
is keen to profit from the trend towards a
transparent and liquid electricity market in
all European countries. With VERBUND-
Austrian Power Sales GmbH (APS) and the
interest in Energie Klagenfurt GmbH
(EKG), we have been paving the way for
free supplier selection and cost competition
in Austria since 2005. In 2006, we further
strengthened our position abroad
through the acquisition of an interest in
Poweo S.A. in France and Sorgenia S.p.A.
in Italy.
CLIMATE PROTECTION
Climate protection is one of the world’s
greatest economic and environmental challenges.
The introduction, with effect from
1 January 2005, of Europe-wide emission
trading, which leans on the Kyoto Protocol
and represents a market-oriented solution,
was an important first step. We firmly believe
that this system should be continued
in the energy and industry sectors and introduced
to additional sectors beyond the
year 2012. The Kyoto targets should, how-
ever, be adjusted and the equal treatment
of all industrial countries should be strived
for so that at least the relative contributions
of the individual countries to CO 2
reduction can be compared.
Presently, there are still massive differences
that even led to the overall offer surplus for
CO 2 emission rights in 2005 (as announced
by the Commission at the beginning of
May 2006) in spite of the drastic scarcity of
emission rights in many countries. In spite
of the fact that most of the electricity produced
in Austria is generated using hydropower,
Austria is clearly one of the
purchasing countries within the EU. This is
attributable to the high ambitious Kyoto
goal as well as to the growth in CO 2 emissions,
above all in the transport area, which,
from a political perspective, does not grant
easy access to environmental protection
measures.
The energy industry in Austria therefore
makes a disproportionate contribution to
CO 2 reduction at a national level. In the
last years, CO 2 emissions from the Verbund
thermal power plants amounted – depending
on the utilization periods – to approx.
5 million tons per annum. The authorities,
however, have set an annual limit of 3.34
million tons for Verbund for the period
2005 to 2007. As the Verbund power plants
are already operated at a highly efficient
level and the potential for further reduction
is minimal, it was necessary to purchase
emission rights on the market in the last
two years to cover the »shortfall«. In spite
of this, the number of emission rights to be
allocated for the period 2008 to 2012 is
likely to be reduced even further. Given
that electricity consumption in Austria is
expected to grow up to 2012, a sharper increase
in the purchasing requirement
would appear to be inevitable.
Plant operators in the EU can, however,
with limitations, purchase emission rights
from other EU countries via the Joint Implementation
Mechanism and Clean
Development Mechanism (JI/CDM) of the
Kyoto Protocol. In this way, the procurement
portfolio can be diversified and more
favorable options for the purchase of CO 2
emission rights can be sounded out. Ver-
bund has opted to participate in the
JI/CDM projects.
IMPLEMENTATION OF THE EU
WATER FRAMEWORK DIRECTIVE
Under the EU Water Framework Directive,
all member states of the European Union
must ensure that all waters are in a »good
ecological condition« by 2015. To ensure
that this does not have a negative impact
on the utilization of the waters, the deadline
can either be extended to max. 2027 or
the category »heavily modified water bodies«
can be used where »good ecological
potential (GEP)« must be achieved in the
place of »good ecological condition«.
Water routes used in the generation of
electricity were, with few exceptions, categorized
as »heavily modified water bodies«.
In principle, this is positive for hydropower
utilization, but it does not mean that no
measures will have to be implemented to
achieve GEP.
JOINT IMPLEMENTATION SINCE 2003
In 2003, Verbund – through its subsidiary
Verbundplan – signed its first agreement
relating to the utilization of the flexible
mechanisms of the Kyoto Protocol with
the Bulgarian energy supply company
Natsionalna Elektricheska Kompania. The
project »Tsankov Kamak« involved the
construction of an arch dam and an 80 MW
hydropower plant 250 km to the east of
Sofia. When financing the project, the
consortium of Austrian industrial companies
adopted a totally new approach in
that 10 % was financed via emission
rights from the Joint Implementation
Mechanism.
The Austrian Carbon Credit program, on
behalf of the Republic of Austria, purchased
all the emission certificates that will be
generated annually from the first commissioning
of the plant in January 2008
until the end of the Kyoto period in 2012.
The project was awarded the title »Deal
of the Year 2003« by the British financial
publication Euromoney Trade Finance.
15

16
The latest analysis of the situation revealed
that 56 % of the surface water body in Austria
displays a definite risk and – due to
missing data – 28 % a possible risk of not
being in a good ecological condition. The
analysis also revealed that there is a possibility
of the target not being achieved due
to hydromorphological changes. And this
in a country where hydropower, flood protection
and navigation all play a major
role!
In 2006, a task force at EU level focused on
identifying the conflicts between the Water
Framework Directive and other EU directives
and examined the types of water utilization
– flood protection, navigation and
electricity generation – that have the
greatest effects on the hydromorphology,
i.e. the condition of the waters. In this context,
an alternative approach to determining
the »good ecological potential« of the
waters was developed.
The findings of the task force are summarized
in a »policy paper« and a »technical
paper«. The alternative approach to achieving
»good ecological potential« using the
most cost-effective measures raises hopes
for the moderate implementation of the
EU Water Framework Directive. The papers
also emphasize the advantages of hydropower
with regard to climate protection.
UCTE ON SECURITY OF SUPPLY
»Confirmed investment decisions seem
sufficient, at UCTE’s level, to allow a
reasonable level of adequacy from now
on to 2010. Nevertheless, security will be
at risk after 2013–2014 if further investments
are not decided in due time; the
reliability of UCTE system cannot be considered
as achieved at this time horizon.«
»(…) Without any additional commissioning
program (…) for 2013–2014, the
security of the whole UCTE grid will no
more be secured.«
Source: Union for the Coordination of
Transmission of Electricity (UCTE):
System Adequacy Forecast 2006–2015.
The implementation of surge reduction at
the storage power plants is, however, still
the greatest challenge. Individual power
plants of VERBUND-Austrian Hydro
Power AG (AHP) could lose up to 87 % of
their capacity to provide standard and reserve
output.
The national implementation process is
currently working on a monitoring program
and the documentation of the current
situation in small catchment areas (10
to 100 km 2 ). AHP is already conducting
measures ahead of schedule in areas where
this is meaningful – e.g. in areas where
construction work is already in progress.
With our expertise and through our participation
in research projects we will make a
valuable contribution to ensuring that the
requirements set down in the EU Water
Framework Directive are implemented in
an environmentally compatible manner.
ELECTRICITY CONSUMPTION IN
EUROPE CONTINUES TO GROW
A range of technologies that focus on increasing
efficiency and reducing energy
consumption is already available or will
soon become available, e.g. for the important
areas of heat and mobility. In spite of
this, electricity consumption has continued
to grow thus leading to a further intensification
of the problem in areas where the
energy supply situation is already rather
tense.
The economy of the EU-25 is expected to
grow by an average of 2.1 % up to 2010.
This growth will be triggered by growing
corporate investment and the stabilization
of consumption expenditure due to the
improved labor market.
The positive economic forecast is also reflected
in the forecast for electricity consumption.
Electricity consumption in
Europe is expected to increase by 1.8 % per
year up to 2010. The service sector is likely
to be the main growth driver at 2.8 %. In
2010, electricity consumption in Europe
will be 20 % higher than the current consumption
level and in 2030 consumption
will have increased by 50 %.
On the basis of these forecasts, it is important
that the energy mix be broadened to
the greatest extent possible so as to reduce
supply and environmental risks and combine
the advantages and disadvantages of
the individual energy carriers with a view
to maximizing the economic benefits.
SECURITY OF SUPPLY
Since the start of deregulation, there has
been a clear drop in generation capacities
in spite of the strong increase in electricity
consumption. Although security of supply
is not endangered in Austria at this time,
investment in new power plants and line
capacities is vital for the future.
Line congestion in a number of markets
has already led to supply deficits: on 28 August
2003 in London, on 23 September
2003 in Denmark/Sweden, on 28 September
2003 in Italy and on 4 November 2006
in Germany.
The International Energy Agency (IEA) expects
that new power plant capacities of
500 to 600 gigawatt (500 to 600 million
kW) will be required in the EU-15 alone by
2030. New capacities totalling 300 gigawatt
(300 million kW) will be needed by 2020.
In addition to efficient energy utilization,
security of supply will be one of the most
important issues for energy utilities in the
future. The IEA believes that the investment
costs for the maintenance and construction
of power plants and the improvement
of the high-voltage distribution grid
will run to € 1,300 billion in the European
OECD countries.
These funds cannot be met without private
capital; hence, it is vital that an attractive
investment climate be created for potential
investors. Even if electricity generation
from renewable sources of energy is subsidized
by the government, the experts are
unanimous that the growing demand will
have to be covered, above all, with energy
from fossil energy sources such as oil, gas
and coal. High oil prices, Europe’s heavy
dependence on the OPEC countries and
Russia and new uncertainty relating to the
long-term availability of fossil fuels have

led to considerations on the utilization of
innovative technologies.
The trans-European electricity and gas networks
also need to be improved. At present,
the exchange of electricity is hindered
particularly in the border areas, and this
will inevitably delay the total deregulation
of the European energy market. A doubling
of cross-border electricity transmission to
approx. 20 % of consumption could have a
decisive positive impact on the deregulation
process and guarantee security of supply.
In spite of all the obstacles, it is essential
that European hydropower resources are
further expanded and the efficiency of the
existing power plants further improved.
Within the EU, the accession candidates in
the East-European region still have free resources
available. These should be exploited,
not just for environmental reasons but
also in order to provide foreseeable bottlenecks
and promote self-sufficiency at a
national and regional level.
MODERNIZATION OF THE AUSTRIAN
POWER PLANT PARK
In the next years, Austria too will have to
focus not only on the renovation of older
power plants but also on the construction
of new capacities to cover the increase in
demand. According to WIFO, electricity
consumption in Austria will have increased
by an average of 2.3 % per annum by 2010
and by 2.7 % per annum in the period
from 2010 to 2020. This corresponds to an
increase of 45 % compared to the present
level. For this reason, investment in new
power plants is essential. E-Control believes
that additional capacities of approx.
3,800 MW could be fed into the grid by
2010. In addition, further expansion projects
need to be implemented to guarantee
security of supply in Austria after 2015.
There are, however, numerous uncertainty
factors that hinder investment security:
growing environmental requirements, e.g.
through the Water Framework Directive,
the volatility of the fuel prices, the risks associated
with technical innovation, an insecure
regulatory environment, large fluctua-
tions in the development of the electricity
prices and compliance with the Kyoto Protocol.
In spite of these insecurities, investment in
new power plant capacities has become a
priority element of corporate planning in
the electricity sector. Electricity companies
that succeed in achieving an optimal power
plant mix in the medium to long term will
have a competitive edge.
INEFFICIENCY OF CO 2 EMISSION
RIGHTS MARKET
The CO 2 prices on the spot market rose
from € 21.8/t at the beginning of the year
to € 29.8/t on 18 April 2006. The announcement
of a significant surplus in various EU
countries sent the CO 2 prices into a tailspin
from 27 April 2006 onwards. Towards the
end of fiscal 2006 the spot prices lay at just
over € 6.0/t.
From the commencement of emissions
trading there has been a strong correlation
between the prices for electricity, oil and
gas and the prices for CO 2 emission rights.
Owing to the clear over-allocation of almost
100 million certificates in 2005, the
prices for electricity and European Union
Allowances (EUA) have now become uncoupled.
Based on the current situation, it
is not likely that the emissions in 2006 and
2007 will be so high that the surplus of
emission rights from 2005 will be depleted
or that there will even be a scarcity of CO 2
certificates.
WHOLESALE PRICES FOR
ELECTRICITY ROSE SIGNIFICANTLY
IN 2006
Taking the annual average, the base spot
prices came to € 50.8/MWh in 2006 and
were therefore 10 % higher than the value
recorded in 2005 (€ 46.0/MWh). The peak
spot prices increased by as much as 16 % in
2006 and lay at € 73.3/MWh compared to
€ 63.1/MWh the previous year.
The prices for the primary energy sources
crude oil, natural gas and coal also rose significantly
in 2006. Together with the price
for CO 2 and the spot market, they influenced
the forward market for electricity: in
2005, the average price for annual base for
2007 was € 39.8/MWh, in 2006, the average
price climbed to € 55.0/MWh. The average
price for annual peak for 2007 rose
from € 54.3/MWh in 2005 to € 81.0/MWh
in 2006.
ELECTRICITY GENERATION MIX IN THE EU-25 TO 2030 %
100
90
80
70
60
50
40
30
20
10
0
Nuclear Solids Oil Gas Biomass-waste
Hydro and other renewables Wind energy
Source: PRIMES
2000 2005 2010 2015 2020 2025 2030
17

18
CO 2 EMISSION RIGHTS – PRICE DEVELOPMENT ON THE SPOT MARKET €/t
30
20
10
0
01.01.
Source: APT
2005 31.12. 01.01. 2006 31.12.
RISKS AND GOALS 2007
The economic framework for the future
will be marked by increasing regulatory
pressure, uncertainty relating to the development
of the wholesale prices, lower reserve
capacities in European electricity generation
and Europe’s growing dependence
on natural gas from Russia.
A long-term price reduction for crude oil
and natural gas and a lowering of the prices
for CO 2 certificates in the second allocation
period between 2008 and 2012 would
most likely have a negative impact on the
group result.
The risks associated with ownership unbundling,
which is required for grid com-
panies under EU legislation, will not pose a
threat for Verbund. In 1999, the regulated
transmission and distribution grids were
clearly separated from electricity generation,
trading and distribution activities.
Other risks include the implementation of
the Water Framework Directive and the
proposed introduction of a water interest
rate or a water tax in Austria. Both would
have a negative impact on the development
of the Verbund result.
In spite of the difficult framework conditions,
we expect that the business development
in 2007 will also be positive. As 60 %
of our annual electricity generation was already
sold last year at market indexed prices,
we will report a further increase in the
PLATTS FORWARD FOR A ONE-YEAR PRODUCT 2007 BASE AND PEAK €/MWh
90
80
70
60
50
40
+49 %
Ø 2005: 54.3 €/MWh Ø 2006: 81.0 €/MWh
+38 %
Ø 2005: 39.8 €/MWh Ø 2006: 55.0 €/MWh
01.01. 2005
31.12. 01.01. 2006 31.12.
Platts Front Year Peak
Platts Front Year Base
average contract prices in fiscal 2007 and
hence an improved result.
We will further enhance our focus on profitable
investments and acquisitions in Austria
and abroad.
Our investment program in the amount of
€ 2.5 billion for the period 2007 to 2011
focuses, above all, on the further expansion
of domestic power plant capacities and the
Austrian high-voltage grid.
In addition, we plan to strengthen our
M&A activities in Europe. The central aim
is to extend existing interests in resellers in
Austria and acquire vertically integrated
suppliers and generation companies
abroad.
The primary target markets are, above all,
the neighboring markets Italy, Germany
and Slovenia as well as France, where we
have already established successful subsidiaries
and joint ventures. In addition, we
also aim to achieve profitable growth in
Romania, Macedonia, Greece and Turkey.
We also plan to significantly increase our
share in the Austrian end customer market
in fiscal 2007 and will continue to significantly
boost competition in the end customer
distribution area through our direct
distribution company VERBUND-Austrian
Power Sales GmbH (APS).

Base
ELECTRICITY MARKET
Electricity supply within a standardized
supply period (month, quarter, year) with
deliveries from Monday to Sunday and the
24 delivery hours between midnight and
12 pm per delivery day.
Peak
Electricity supply within a standardized
supply period (month, quarter, year) with
deliveries from Monday to Sunday and
the 12 delivery hours between 8 am and
8 pm per delivery day.
Spot market
Generic term for an institutionalized shortterm
market on which spot transactions
are carried out bilaterally OTC (over the
counter) or through the market. The spot
market usually closes 12 hours prior to
the execution of the contract (day-ahead).
Forward market
Physical products or securities are not
traded on forward markets. This market
focuses on contracts relating to transactions
that will be completed in the
future. These are known as derivatives.
The price for the object is determined at
the time the contract is concluded. Forward
markets are future-oriented markets
that supplement the spot and cash markets.
Forwards
Forwards are derivatives. They are nonstandardized
forward transactions with
clearly defined characteristics. In contrast
to cash transactions where obligation (e.g.
purchase/sale of a share) is immediately
followed by fulfilment (delivery), the fulfilment
of a forward transaction lies in
the future. Unlike options, which are
subject to a party’s right though not
obligation to exercise the transaction,
forwards belong to the group of
unconditional forward transactions. In
contrast to futures, which are traded on
the stock markets, forwards are nonstandardized.
The parties themselves
negotiate the conditions and the transaction
does not take place via the stock
market but over the counter.
19

HYDROPOWER
FACTS AND FIGURES
In 2006, we generated
23,854 GWh of electricity
at our hydropower
plants. This is enough
to meet the annual
requirement of six
million households.
HOW A STORAGE POWER PLANT FUNCTIONS
Fall
Reservoir Barrage wall
Height of turbine axis
If this amount of electricity had been
generated at thermal power plants, approx.
10 hard coal power plants the same size as
the Dürnrohr power plant would have
been needed resulting in an additional
22 million tons of CO 2 emissions. Hydropower
therefore makes an important contribution
to reducing air pollutants and, in
particular, greenhouse gases.
Surge tank
Valve chamber
Pressure pipeline
Power house
Ball
valve
Twin-jet
Pelton
turbine
Underwater
21

22
Hydropower is …
o a renewable source of energy that is
used but never used up,
o a domestic »raw material« that reduces
our dependence on foreign countries,
o and a contribution to achieving the Kyoto
goals: 22 million tons of CO2 emissions
were prevented in 2006 through the
utilization of hydropower.
60 YEARS OF HYDROPOWER
GENERATION AT VERBUND
Hydropower refers to the production of
electricity by harnessing the power of flowing
water. In past times, the flowing water
was used to drive the machines in mills.
Today, the power of the flowing water is
converted into electrical energy in hydropower
plants. The potential energy of the
water in rivers or storage lakes is transformed
into kinetic energy, which drives
the turbines. This kinetic energy is converted
to electricity in generators. Tiny water
drops evaporate into the air, are carried
away by the wind and eventually fall to the
earth again as rain. The water can be used
again while it is flowing from higher to
lower areas. Hydropower is therefore a
regenerative or renewable source of energy.
Hydropower also has another advantage:
unlike electricity, it can be »stored«. Water
is collected in the retention basins of storage
power plants and converted to electricity
in line with demand.
Electricity generation from hydropower is
the most efficient form of energy conversion
with an efficiency level of 90 %. By
way of comparison: a coal-fired power
plant has an efficiency level of between 25 %
and 45 %, a wind power plant lies at 40 %,
a light water reactor lies at 33 %, a bicycle
dynamo has an efficiency level of between
20 % and 60 % and a solar cell lies between
5 % and 29 %.
Hydropower plants account for just under
18 % of the electrical energy that is
generated worldwide and are therefore almost
on a par with nuclear power. At this
time, hydropower is the only renewable
source of energy that makes a notable contribution
to the generation of electricity for
the earth’s population. The other renewa-
ECO-ELECTRICITY – FEED-IN VOLUMES AND COMPENSATION IN AUSTRIA 2006 AND 2005
GENERATION STRUCTURE IN AUSTRIA %
Total generation 2005: 165.8 TWh
38
6
20
20
3
Run-of-river power plants Storage power plants Coal
Natural gas Renewables, other Heating oil
ble energy forms such as solar energy, wind
power, the natural heat of the earth and
biomass together account for approx. 2.1 %.
The theoretical hydropower potential of
the earth is estimated at 40,000 TWh per
year. Of this amount, 14,000 TWh can be
used in a technical sense and 8,000 TWh
economically. In 2005, just under 3,000 TWh
of electricity was generated at hydropower
plants worldwide. This is less than 40 % of
the economic potential. More than half of
the electricity was generated in just five
Feed-in Compensation Feed-in Compen- Average Feed-in Compensation Average
volume net in volume sation compensation in volume net in compensation in
Energy carrier in GWh 2006 € million 2006 % share % share c/kWh 2006 in GWh 2005 € million 2005 c/kWh 2005
Small hydropower 1,810 93.5 35.40 21.45 5.16 3,561 162.6 4.57
Other eco-electricity plants 3,304 342.3 64.60 78.55 10.36 2,212 208.9 9.44
Wind power 1,738 135.2 33.98 31.02 7.78 1,328 102.9 7.75
Biomass solid incl. waste
with a high biogenic share 1,086 137.3 21.23 31.50 12.64 553 59.1 10.69
Biomass gaseous 358 49.6 7.01 11.37 13.83 220 29.3 13.31
Biomass liquid 54 7.5 1.05 1.73 13.99 33 4.6 14.16
Photovoltaics 13 8.7 0.26 1.99 64.46 13 8.4 65.14
Landfill and sludge gas 52 3.8 1.01 0.87 7.36 63 4.4 6.91
Geothermal energy 3 0.3 0.06 0.06 8.76 2 0.2 8.15
Total small hydropower and 5,114 435.8 100.00 100.00 8.52 5,773 371.5 6.43
other eco-electricty plants
Source: E-Control, notification from eco-balance group representative, November 2006 – preliminary values
13

INVESTMENT AND ELECTRICITY GENERATION COSTS FOR »NEW« RENEWABLES
countries: Canada, USA, Brazil, China and
Russia. Many countries believe that the expansion
of hydropower will play a key role
in their future development. China has the
most ambitious goals and Brazil, India, Columbia,
Iran, the Republic of Congo, Russia
and Turkey also have big plans relating
to the future utilization of hydropower.
In 2006, the contribution of hydropower to
the supply of primary energy worldwide
came to 6.4 %. Hydropower is ranked No. 3
for electricity generation worldwide after
coal and oil/gas.
According to EUROSTAT, hydropower accounted
for 11 % of total electricity generation
in the 25 member states of the Euro-
Small hydropower Wind power Solid Liquid Biogas Landfill/ Photovoltaic
New Revital. biomass biomass sludge gas plants
Investment costs €/kW 2,500–5,000 1,000 800–1,200 3,000–4,800 2,000–4,200 2,900–6,200 2,000 3,500–5,000
Electricity generation costs €/MWh 32–63 79 102–160 66–120 77–165 below costs 470–600
for biogas
Investment costs in accordance with materials on the Eco-Electricity Act Amendment 2006.
Electricity generation costs in accordance with E-Control. The size of the investment depends on the type and size of the plant, the possibility of heat utilization and the associated technical requirements.
Depending on the technology selected, costs for fuel storage and fuel transport systems are priced into the investment costs in addition to the costs for the constructional, electrotechnical
and mechanical components of the plant.
MORE HYDROPOWER IN VERBUND
pean Union with France, Sweden, Italy,
Austria, Spain, Germany, Finland and Portugal
being the main contributors. Hydropower
does, however, make a contribution
of 19 % to the provision of bottleneck capacity.
Based on the share of hydropower
in electricity generation at a national level,
Latvia, where 70 % of the electricity is produced
using hydropower, can be found at
the top of the list followed by Austria (60 %)
and Sweden (40 %).
HYDROPOWER IN AUSTRIA
The topographical conditions in Austria
are ideal for the utilization of hydropower.
Differences in height and water volumes
Location of power plant Measure Capacity Start of Commissioning
construction
StadtKraftWerk Leoben Replacement of old power plant 9.99 MW 2003 2005
Nußdorf Turbines in inlet structure
Wienfluß 4.75 MW 2004 2005
Werfen/Pfarrwerfen New plant 16 MW 2006 2009
Grenzkraftwerk Inn New plant 88 MW 2009 2013
Aschach Replacement of turbine RAV + 45 GWh 2005 2010
Gerlos II New power house 135 MW 2004 2007
Limberg II New cavern power plant 480 MW 2006 2012
Hieflau Expansion Preliminary project
Pernegg Revitalization Preliminary project
Arnstein Revitalization Preliminary project
provide a theoretical hydropower potential
of 150,000 GWh. The feasible potential is
56,200 GWh. Of this amount, 40,000 GWh
(71 %) is already being used.
In Austria, hydropower covers 60 % of the
domestic demand for electricity. With a
share of 9 % (2005) in the total gross domestic
energy consumption and a share of
42 % in the renewable sources of energy,
Hydropower is clearly the most significant
renewable energy carrier in Austria in
terms of quantities.
Small hydropower (up to 10 MW) is one of
the more cost-effective renewable energy
carriers among the »new renewable energies«.
Moreover, following the enactment
The further expansion of hydropower at
Verbund will take place through the implementation
of new construction projects
and efficiency enhancements at existing
locations.
A number of variants are currently being
examined for the revitalization of the
powerplants Pernegg and Arnstein.
The water rights for these plants run until
2011 and 2013 respectively and the
earliest submission dates to apply for the
regranting of water rights lie in 2007 and
2008.
23

24
ELECTRICITY GENERATION MIX IN UCTE COUNTRIES %
Austria
Belgium
Bosnia-Herzegow.
Bulgaria
Denmark West
Germany
France
Greece
Holland
Italy
Croatia
Luxembourg
Mazedonia
Poland
Portugal
Runania
Switzerland
Serbia
Slovakia
Slovenia
Spain
Czech Republic
Hungary
Ukraine West
EU Total:
37,77 | 55,64 | 6,58
40,70 | 55,04 | 1,94 | 2,31
52,38 | 47,62
47,18 | 42,21 | 10,61
70,78 | 29,22
62,29 | 26,91 | 4,11 | 6,69
10,79 | 78,77 | 10,26 | 0,18
86,60 | 11,20 | 2,20
89,94 | 3,94 | 6,12
83,15 | 14,47 | 2,38
46,22 | 53,78
75,61 | 21,95 | 2,44
76,92 | 23,08
97,36 | 2,50 | 0,14
80,73 | 11,24 | 8,03
54,38 | 9,31 | 36,31
3,80 | 38,00 | 56,65 | 1,55
66,43 | 33,57
18,84 | 56,16 | 15,75 | 9,25
31,82 | 42,42 | 25,76
59,27 | 21,54 | 9,23 | 9,97
65,35 | 30,58 | 3,94 | 0,13
54,08 | 39,27 | 0,60 | 6,04
98,77 | 0 | 1,23 | 0
TWh Share
Thermal power, conventional 1,350.1 53.27 %
Thermal power, nuclear 792.8 31.28 %
Hydropower 292.9 11.56 %
Other 98.7 3.89 %
Customers 2,534.5 100 %
of the Eco-Electricity Act Amendment
2006, »medium-sized hydropower« (10 to
20 MW) is also included in the subsidy
program. In this way, the legislator took account
of the meaningfulness of this type of
electricity generation. This allowed Verbund
to implement projects which would
otherwise not have been economically feasible
on account of the deregulation process,
e.g. the run-of-river plant Werfen/
Pfarrwerfen on the Salzach (see project
description on page 30).
The revitalization of existing hydropower
plants proves to be a particularly costeffective
approach. The revitalization costs
come to approx. € 1,000/kW. The operating
costs for optimally designed, low maintenance
hydropower plants are very low,
averaging under 1 c/kWh. These costs are
mainly attributable to personnel, administration,
insurance and repairs.
HYDROPOWER IN VERBUND
Verbund has the highest hydropower share
of all electricity producers in the EU. In
2006, this share came to 85 %. 86 run-ofriver
plants generate electricity round the
clock to cover base load, and 21 storage
power plants inside the mountains »store«
water to cover peak demand at certain
times of the day. Water is stored in the large
storage lakes above all during the summer
season to be used for electricity generation
in the winter months when there is lots of
snow but little water. In 2005, the runof-river
plants of Verbund generated
20,300 GWh of electricity. 4,500 GWh was
generated at the storage power plants.
ADDITIONAL BENEFITS THROUGH
HYDROPOWER PLANTS
Hydropower plants are not just used to
generate electricity, they have numerous
other functions: flood protection and water
supply as well as infrastructure provision.
The Danube power plant chain makes navigation
safer, faster and cheaper. Each year,
approx. 130,000 vessels pass through the
locks on the Danube. Matrix turbines are

installed so that the lock water can also be
used to generate electricity.
The local municipalities benefit from additional
recreation areas that are created
when constructing the power plant: bicycle
lanes, swimming areas, harbors and fishing
areas create new leisure possibilities for
sport enthusiasts, families and anglers. The
long reservoir areas of the Danube power
plants and the redevelopment of the side
arms to create bathing lakes make a significant
contribution to boosting local
tourism. The side arms of the Danube also
became very popular recreation areas.
In the Alps, Tauern-Touristik GmbH – a
100 % subsidiary of Verbund – uses the
climbing aids that were required during the
construction of the storage power plants in
Reisseck and Kaprun to bring hikers into
the Alps. Every year, approx. 400,000 visitors
make use of this possibility to experi-
MULTIFUNCTIONALITY OF HYDROPOWER UTILIZATION
FLOOD PROTECTION
ence nature and technology at a height of
2,000 m above sea level.
REQUIREMENTS FOR THE
FURTHER UTILIZATION
OF HYDROPOWER
To guarantee the efficient utilization and
expansion of hydropower it is essential that
politicians, regulators, consumers and industry
share a common vision for a futureoriented
European electricity industry.
In spite of the numerous advantages of
hydropower, the strict implementation of
the EU Water Framework Directive could
lead to significant generation losses at runof-river
and threshold power plants and
lower the capacities that are available at the
storage power plants. Here, it is vital to
find an approach of implementing the
directive, while at the same time, the posi-
WASTE WATER
TREATMENT
tive contribution of hydropower to environmentally
friendly power generation be
maintained to the greatest extent possible.
Any losses that occur must be compensated
by accompanying measures:
o Approval procedures must be
accelerated by reducing the processing
times and concentrating on a smaller
number of competent experts.
o The EIA process should only be
necessary for hydropower plants with
an output greater than 15 MW and
should not be applicable when integrating
new technology into existing
facilities.
o License extensions and the regranting
of licenses should be accelerated.
INFRASTRUCTURE ECOLOGY (CO2)
WATER MANAGEMENT NAVIGATION LEISURE/RECREATION WATER SUPPLY
25

A NEW
POWER PLANT
INSIDE THE
MOUNTAIN
PUMPED-STORAGE POWER PLANT LIMBERG II
The Kaprun power
plant group, which
celebrated its 50 th
anniversary in 2005, is
a milestone in Austrian
electricity supply and
a symbol for the economic
upswing and
the rebuilding of
Austria after the
Second World War.
On 23 September 1955 – after a construction
period of 17 years – the two 100 m
high barrage walls at Mooserboden were
completed at a height of 2,000 m above sea
level and a topping-off ceremony was held
to mark the official completion of the
gigantic construction project. The two
storage lakes Mooserboden and Wasserfall-
boden can store more that 166 million m 3
of water that can be converted to electricity
at the touch of a button.
PROJECT DESCRIPTION
The new pumped-storage power plant
»Limberg II«, which is being constructed
by VERBUND-Austrian Hydro Power AG
(AHP) to supplement the existing Kaprun
power plant group, is located at the rear of
the Kaprun Valley.
The balancing and backup power plant
»Limberg II« will more than double the
output of the Kaprun power plant group
from 353 MW to 833 MW by making optimal
use of the difference in height between
the existing Alpine storage lakes »Mooserboden«
(2,036 m above sea level) and
»Wasserfallboden« (1,672 m above sea
level).
The access tunnel, which is currently under
construction, should be completed by
spring 2007. Work will then commence on
the construction of the cavern and the
pressure shaft. The commissioning of the
27

28
first machine unit is scheduled for the fall
of 2011 and full operation should commence
in March 2012.
INVISIBLE POWER PLANT
INSIDE THE MOUNTAINS
The entire power plant will be built underground.
A 62 m long machine cavern with
a width of 25 m and a height of 43 m will
be excavated for each of the 240 MW machine
units thus creating a »dome« inside
the mountain big enough to accommodate
the entire nave of the Stephansdom in
Vienna. The transformers will be installed
in a separate transformer cavern with a
length of 61 m, a width of 15 m and a
height of16 m. Both caverns are located approx.
250 m down the valley from the Limberg
dam in the right flank of the valley.
They can be accessed all through the year
via a 7 km long single-lane tunnel. A water
works channel extending over 5.4 km in
the right flank of the valley will connect
the annual storage reservoirs Mooserboden
and Wasserfallboden.
ECONOMIC ASPECTS
The total investment volume for this project
comes to € 365 million. 98 % of all orders
placed to date have gone to Austrian
companies. The profitability of the pumpedstorage
power plants has changed significantly
since the commencement of deregulation.
This is attributable, above all, to the
development of the electricity prices in the
View from the newly designed biotope at Wasserfallboden storage lake
last years, where the peak prices increased
to a much greater extent than the base prices.
Furthermore, the pumped-storage
power plants are ideal from a controlling
perspective and, in view of the massive expansion
of wind power, this will prove to
be a great advantage.
ECOLOGICAL ASPECTS
Large construction projects always have an
impact on nature. To reduce the effects to a
minimum, great attention was paid to protecting
nature even in the planning phase
of the Limberg II project. The central point
in this respect was the decision to construct
a cavern power plant where not only the
pressure tunnels, but also the surge tank,
the pressure shaft and the machine and
transformer caverns of the new power
plant are located inside the mountain. The
development of the construction site also
took place via tunnels that were created in
an environmentally friendly manner using
state-of-the-art heading and cutting machines.
On completion of the »power plant
inside the mountain«, only the entrance
gate to the machine cavern will be visible.
When carrying out construction work in
the Alpine region, temporary surfaces have
to be prepared for machines and the storage
of building materials. The infrastructure
surfaces are designed such that they will
not have an adverse effect on nature. In cooperation
with experts from the Salzburg
Institute for Ecology, appropriate cultiva-
tion measures were drawn up. The existing
vegetation is carefully removed, stored in
an appropriate manner and returned to the
areas that require greenery on completion
of the construction work. An optimal selection
of Alpine plants is then sown between
the grass areas. This stabilizes the
surface and ensures that the original vegetation
is quickly restored. The project is
monitored over the entire construction
period. Two biotopes which were located
close to the construction area were also
moved to a new location so as to preserve
the ecology.
SOCIAL ASPECTS
The project brings an employment effect of
5,000 man-years over the total construction
period. On average, 100 to 250 persons
will be working on the site. Due to the
high level of indirect profitability, the construction
of Limberg II will have a positive
effect on the regional economy and labor
market, boosting not only the building and
ancillary building trades, but also bringing
more business to the retail, gastronomy
and hotel sectors. In the planning phase,
the public were comprehensively informed
with regard to the background and goals of
the project and the planned procedures.
Citizens also have access to information
throughout the entire building phase via
the free info hotline 0800 230600 or the
homepage www.limberg2.at. Inquiries and
suggestions from the public can also be
forwarded by e-mail to info@limberg2.at.

General director Dipl.-Ing. Hans Haider and head of the provincial government Gabi Burgstaller unveil a plaque in memory of the victims of forced labor
THE MYTH
OF KAPRUN
The Kaprun power plant group, which
celebrated its 50 th anniversary in
2005, serves as a milestone in Austrian
electricity supply and a symbol for
the economic upswing and the rebuilding
of Austria after the Second World.
On 23 September 1955, the year in
which the treaty was signed, a toppingoff
ceremony was held to mark the official
completion of the gigantic construction
project which brought an
enormous economic upswing to the
Kaprun region.
In 1951, Funds from the Marshall
Plan were used to build the 120 m
high Limberg Dam at 1,672 m above
sea level.
On the same day, the two 100 m high
barrage walls were also completed
at Mooserboden at a height of over
2,000 m above sea level after a construction
period of 17 years. More
than 166 million m 3 of water can now
be stored at the two storage lakes
Mooserboden and Wasserfallboden.
HISTORY OF POWER PLANT
CONSTRUCTION DURING
THE NAZI REGIME
During the Second World War, forced
laborers were also involved in the construction
of several power plants and
grid facilities which are now the property
of Verbund. After the war, the
fate of the forced laborers and prisoners
faded from memory and their
story found no place in the »Myth of
Kaprun«. Although their tragic role
during the war was, in part, documented
and published, conclusive research
results were not available.
For this reason, Verbund instructed a
historical commission under the leadership
of Univ.-Doz. DDr. Oliver Rathkolb
to examine the »Use of prisoners of
war, foreign civilian workers and prisoners
from concentration camps within
the framework of Alpen-Elektrowerke
AG between 1938 and 1945«. The
final report on the living and working
conditions of the forced laborers was
published as a book in 2003 and
makes an important contribution to
correcting the distorted historical picture.
PUMPED STORAGE POWER
PLANTS URGENTLY NEEDED
Electricity has to be generated in the
moment in which it is needed; for
this reason, storage power plants,
which are used to store water that
can be quickly converted to electricity,
are essential. Pumped storage
power plants are particularly effective
as they are also able to pump water
from a lower basin back to a higher
lying basin. Hence, the water can be
used to generate electricity time and
time again.
Wind power is currently booming in
Austria and throughout Europe. This
source of energy does, however, have
one big disadvantage: It is not always
available and it is very difficult to
forecast.
This leads to a rise in the demand
for balancing and backup energy
to ensure stable grid operations.
Pumped storage power plants can
be used flexibly and therefore support
the integration of alternative
energy carriers.
29

30
CONSTRUCTION OF NEW HYDROPOWER PLANT
WERFEN/PFARRWERFEN
VERBUND-Austrian
Hydro Power AG and
Salzburg AG are building
a new power plant with
two bulb turbines and
a three-gate weir system
in the municipalities of
Werfen and Pfarrwerfen.
To ensure optimal energy conversion, the
Salzach will be dammed up approx. five m
and the river bed downstream of the power
plant will be lowered by five m. The power
Digging out the stumps in the area of the main building
plant, which has a construction period of
just under two years, should feed electricity
into the grid from February 2009, full operation
is planned for March 2009. The
plant has an output of 16 MW and will generate
approx. 76.5 million kWh of electricity
for the region each year. This is
enough to supply 22,000 households.
ECONOMIC ASPECTS
The Werfen/Pfarrwerfen power plant is a
joint project of VERBUND-Austrian Hydro
Power AG (AHP) and Salzburg AG.
The construction costs amount to € 63.5
million. The amendment of the Eco-Electricity
Act, under which subsidization of
up to € 6 million is now also available for
hydropower plants with an output of over
10 MW, was an essential prerequisite for
the construction of this joint-venture power
plant. This plant, the fifth hydropower
plant along the middle section of the
Salzach, will supplement the existing power
plants St. Johann, Urreiting, Bischofshofen
and Kreuzbergmaut in an optimal manner.
On completion of the power plant Werfen/Pfarrwerfen,
the overall output of the
power plants on the »Mittlere Salzach« will
increase to 375 million kWh. This is
enough to meet the electricity requirements
of half of the households in the
province of Salzburg.
ECOLOGICAL ASPECTS
As during the construction of Kreuzbergmaut
power plant, extensive measures will
be conducted to preserve the flora and fauna
along the Salzach. The well-known In-
The stumps are carefully stored before they are replanted
at their new location

The rich structure at the bottom of the Salzach downstream of Kalchau Bridge can be clearly seen in low water
stitute for Ecology in Salzburg and the water
authorities of the provincial government
in Salzburg are involved in the ecological
planning.
Tree stumps in the area of the main building
were dug out either as living matter for
later use and stored or as »deadwood
stumps« for structural measures. The
stumps were removed with the greatest of
care so as not to damage the living roots.
On arrival at the storage area, particular attention
was paid to the exact height of the
earth covering. A horse chestnut tree in the
access area was boarded up to prevent
damage. Two white willows, which were
planted to protect the left bank, posed an
obstacle to construction. The trees were
carefully removed and transported to the
intermediate storage area.
SOCIAL ASPECTS
Due to the high level of indirect profitability,
the construction of the Werfen/Pfarrwerfen
power plant will have a positive effect
on the regional economy and labor
market: at peak times, approx. 100 specialists
will be working on the construction
site. The building and ancillary building
trades, as well as the gastronomy and hotel
business stand to profit from this project.
The project operators attach great importance
to open dialog and to ensuring that
the construction work is executed causing
the least disturbance possible to the citizens
in the neighboring municipalities.
A citizens’ advisory board, made up of the
representatives of the neighboring municipalities
and tourism and commercial enterprises,
has been set up to ensure that the
project is implemented in a mutually acceptable
manner. In this way, a satisfactory
solution was also found for those citizens
who live in the immediate vicinity of the
construction site. »Citizen information
evenings« are held at regular intervals to
guarantee that the residents of Werfen and
Pfarrwerfen are comprehensively informed
about the project.
An info hotline (0664 8286038) has been
set up to deal with questions relating to the
construction of the power plant.
DEVELOPMENT OF
ELECTRICITY CONSUMPTION
In 1950, the average Austrian household
used 140 kWh of electricity per year.
Today, consumption per household lies
between 3,500 and 4,000 kWh.
For a number of years, the Austrian electricity
producers have not been able to
fully cover domestic demand. As a result,
electricity must be imported. Independent
studies reveal that electricity consumption
will increase by 45 % by 2020.
The Austrian electricity industry is therefore
very keen to reduce the growing
dependence on imports by building new
power plants and expanding existing
facilities.
The topographical conditions in Austria
and the large water volumes are ideal
for the generation of electricity using
hydropower. Electricity from hydropower
is environmentally friendly and also
forms the basis for a self-sufficient
energy supply.
31

PERNEGG STEAM-GENERATING POWER PLANT
FROM POWER
PLANT TO
GREEN MEADOW
The steam-generating
power plant Pernegg,
which is located in the
Mur Valley, Styria, was
built in two construction
phases from 1956 to 1958
and from 1960 to 1962.
At that time, the plant,
which had two machine
units with an overall
electrical output of
100 MW, was operated
with Austria’s largest
heavy oil-fired, singlepass
boiler.
Up to 1996, the power plant was used as a
peak and backup power plant. In 1997, a
wet conservation was carried out and this
was followed by a dry conservation in
2002. The power plant was demolished in
2005 and 2006.
The Pernegg power plant was one of the
first EMAS-certified locations in Austria
(Register number A-S-0000012 dated
March 1996) and was also one of the first
EMAS locations to be completely demolished
under restoration of the natural
environment. The following considerations
were decisive for the demolition:
o The net efficiency of approx. 30 % was
not up to the latest technical standards.
Moreover, the plant had a remaining
service life of just 5,000 operating hours
thus rendering further operation uneconomic.
o The planned expansion of Pernegg
railway station entailed a connection
of the location to the ÖBB rail network
only until April 2006. Removing the
scrap at a later time would have necessitated
comprehensive logistic measures.
o There was concern that the oil tanks
could constitute an environmental and
safety risk.
o There was a desire to gain experience
for future projects of this magnitude,
e.g. relating to cooperation with
relevant specialist firms and the costs
involved.
33

34
o The utilization possibilities and sales
potential of the property were to be
increased.
o The ongoing conservation costs for
the decommissioned plant were to be
reduced.
o Reusable materials should be salvaged
and the market price for steel scrap was
relatively high during the project
period.
Certain parts of the power plant had to be
retained, e.g. the gatekeeper’s cabin and the
switchyard with the 110 kV coupling of
Steiermark Netz GmbH.
To this end, the enclosure of the switchyard
was reconstructed and an alternative supply
of control voltage, which was originally
supplied via the power plant, was provided.
LEGAL FRAMEWORK
Several steps had to be taken prior to the
commencement of the actual demolition
work.
Cancellation of various rights
o Approval of the water authorities to
store heavy oil and heating oil extra
light,
o Approval of the local electricity
authorities,
o Approval under industrial law in accordance
with the Clean Air Act for Boiler
Plants, and
o Various decisions, e.g. pertaining to the
Railway Law relating to the transfer of
the internal feeder line.
Approval under building law
In the first instance, an application for the
demolition of the building was submitted
to the Mayor of Pernegg.
This included a description of the manner
in which the demolition was to be carried
out, the planned safety measures, the precautions
that would be taken to prevent
disturbance, the manner in which the
demolition material would be sorted and
stored and the sealing measures. These
measures are also required under the Styrian
Electricity Industry Organization Act.
The municipality of Pernegg approved the
demolition but imposed a number of conditions
including:
o The demolition work must be completed
by 15 August 2006 at the latest,
o The number of truck transports on the
streets of the municipality was limited
to approx. 121,
o Scrap and scrap iron could only be
removed by rail,
o The daily working hours were reduced
to reduce noise pollution,
o Evidence of the correct disposal of waste
material had to be submitted to the
authorities,
o Ventilation systems, electrical and
sanitary installations had to be dismantled
manually, sorted and disposed
of in a correct manner,
o When emptying, cleaning and dismantling
oil-contaminated parts of the plant,
in particular the oil tanks, measures had
to be taken to ensure that the ground
would not be polluted or that oil would
not be washed away by precipitation,
o and the base of the oil troughs had to
be examined for impermeability and
mineral oil contamination.
The requirements under the Waste Management
Act, the Employee Protection
Act and the Construction Workers Protection
Ordinance, e.g. for asbestos removal,
also had to be observed.
The thermal power plant Pernegg before
it was put out of commission
PROJECT DESCRIPTION
After all the legal requirements for the demolition
had been met, the removal of the
asbestos – most of which had already been
removed in 1992 – was completed in accordance
with the latest technical standards.
Hence, all the requirements for the demolition
of the entire complex had been satisfied.
The next step involved the decommissioning
of all energized systems and the dismantling
of all electrical installations.
The oil feed systems and, in particular, the
heating oil tanks had to be removed. These
were cut up and dismantled and the foundations
of the tanks and oil troughs were
removed.
The main building was demolished along
with the workshop section. The boiler
house was cut down to a height of 31 m
and dismantled using mobile cranes.
The boiler was separated from the machine
hall, the foundations of the boiler were
blasted and the machine hall and all related
installations were then demolished.
This was followed by the demolition of the
oil pump/cooling water pump house.
The blasting of the boiler house

ECONOMIC ASPECTS
One of the main reasons for the demolition
of the plant was the low net efficiency
level of approx. 30 %. This meant that
electricity could not be generated competitively.
The plant had been decommissioned since
2002 and its demolition saved further conservation
costs (e.g. protection against
frost, technical safety measures) of approx.
€ 100,000 per year.
In total, 28,000 t of building material was
disposed of or sold, above all, concrete,
mineral scrap and waste metal. A large
amount (approx. 23,000 t) of the mineral
scrap was broken down and – following the
removal of foreign components such as
wood and plastics – was used on the site to
refill the foundation pits. 3,100 tons of
steel scrap and 1,450 tons of other scrap
such as aluminium and copper etc. were
sold.
ECOLOGICAL ASPECTS
Apart from the removal of the asbestos, the
disposal of the oils was of particular importance
from an environmental protection
viewpoint. In total, eight heavy oil
tanks, each with a filling volume of
5,000 m 3 , an underground tank for heating
oil, extra light, with a capacity of 60 m 3 and
the oil feed systems, e.g. the transformers,
lubricating oils and oil separators, had to
be emptied and cleaned. In total, 400 tons
of oil was disposed of, with heating oil,
heavy, accounting for the largest share by
far. The remaining 5 m 3 of heating oil,
light, was used as a »diluent oil« for the
cleaning of the heavy oil tanks.
Soil samples, which were taken from the
area under each of the four tanks, were examined
to analyze the ground near the
tank systems. All of the samples showed
normal values for the parameter »Total Hydrocarbon«.
Quote from the auditor:
»There was no oil contamination in the
area of the tank!«
Due to the fact that the mineral scrap material
was used to refill the foundation pits,
it was not necessary to bring in any excavated
material. This reduced the number of
truck transports and also had a positive
impact from an economic and ecological
perspective.
Once all of the building material had been
removed and the foundation pits filled, the
subsoil was sealed and flattened. A 10 cm
deep layer of humus was applied and
planted with greenery. As a result, the land
now has further utilization possibilities.
Pernegg power plant »in a particle size of 0 to 70 mm« Green meadow replaces power plant in June 2006
o Quarters 2 and 3/2005:
Clarification of the legal requirements,
above all cancellation of various rights
o May to July 2005:
Completion of asbestos removal (most
of the asbestos was removed in 1992)
o July 2005:
Municipality of Pernegg approves
demolition
o September 2005:
Deactivation and subsequent
dismantling of energized systems
o September to October 2005:
Dismantling of tanks and oil feed
components
o January to May 2006:
Demolition of buildings, further
technical components and secondary
railway
o May to June 2006:
Refilling of foundation pits,
recultivation of site and completion
of project.
SOCIAL ASPECTS
TIME SCHEDULE
As the plant had already been decommissioned
for a number of years, no employees
worked at this location any longer. Former
employees had already taken up new positions
within the group or had opted for an
early retirement model. As a result, there
were no lay-offs.
During the demolition phase, the protection
and safety of the employees was a central
focus, e.g. while removing the asbestos.
Specially marked contaminated areas were
sealed off, the pressure level was reduced
and ventilation was controlled via a filter.
Personal protective equipment was provided
for each employee, residual fiber bonding
agents were used and the asbestos waste
was double packed before being disposed
of in an appropriate manner.
35

HIGH VOLTAGE
COMPETITION VERSUS
SECURITY OF SUPPLY
On 20 May and
4 November 2006, the
European high-voltage
grid had to contend
with critical situations.
In November, 10 million
people in Western
Europe were left without
electricity when a grid
failure in Germany
cascaded to three grid
regions in Europe.
A major blackout could also take place in
Austria. In spite of the tense grid situation
and the gaps in the 380 kV ring, this has
been prevented up to now thanks to the
professional crisis management of VER-
BUND-Austrian Power Grid AG (APG)
and the cooperation with partners in Austria
and abroad.
Electricity transports at a regional and
supra-regional level have increased enormously
since the deregulation of the European
electricity market. This is attributable
to growing electricity consumption in
Europe and the fact that no new power
plants were built parallel to the decommissioning
of existing plants such as Voitsberg.
Due to the fact that electricity flows influence
each other, a meshed grid can only be
managed at a regional level under consideration
of the physical load flows. Coordinated
processes also take account of the
load flows when border capacities are auctioned
off and, for this reason, this is referred
to as a »load-flow based« process.
When market participants – electricity
traders, producers, consumers – purchase
border capacities for their cross border
trade transactions, the physical flows of
these trade transactions are immediately
calculated. This ensures that grid security
can be controlled in an effective manner.
The European Commission has defined
seven market regions in which this coordinated
load-flow based process should be
installed. VERBUND-Austrian Power Grid
AG (APG) is represented in three of these
regions: Southeast Europe, Central-East
Europe and the north border of Italy. This
development forms the basis for the coordination
of capacities over several borders
as opposed to bilateral allocation between
just two countries. The market participants
therefore have access to maximum capacity
without exceeding the grid load limits.
37

38
On this basis, APG developed an Internet
platform via which the capacities of each
region can be managed in an optimal manner.
The prototype is in the implementation
phase and is currently being tested in
Southeast Europe. This is the first step towards
creating a cross border intra-day
electricity market with continuous trading
via the electricity exchanges, as is envisaged
by the European Union for 2008.
The price differences between the national
markets lead to the generation of revenues
from the bilateral and coordinated auctioning
off of scarce border capacities. It is
estimated that these revenues amount to
approx. € 500 million in Europe. By law,
the grid operators are obliged to use these
revenues to reduce bottlenecks – in the
RELIABLE GRID OPERATION
IS ESSENTIAL FOR:
Competition
A high-capacity transmission grid is vital
to benefit from the possibilities offered
by the deregulated European electricity
market.
Security of supply
Austria’s integration into a pan-European
electricity grid guarantees security of
supply when power plants fail at a national
level and a massive drop in reserve
capacities. Being a part of the UCTE
interconnected grid, only 74 MW of
national reserves are now necessary
for Austria instead of »backup power
plants« with an output of 500 MW.
Location development
An efficient transmission grid paves the
way for the development of industrial
and business locations, enhances competitiveness
at an international level
and reduces costs.
Enormous energy savings
Transporting electricity via high-voltage
lines prevents expensive line losses and
therefore contributes to the general goal
of saving energy.
short term through the changed power
plant utilization (re-dispatch) and in the
long term through the construction of
lines. Surplus revenues are entered in the
tariff equation thus reducing the tariffs for
the grid customers.
380 KV RING MUST BE COMPLETED
APG aims to eliminate line congestion as
quickly as possible. Sections of the supraregional
transmission grid in Austria are,
however, still being operated at the 220 kV
level.
The swift expansion of the
380 kV line has been adopted
in the government program
2007 to 2010.
The internal congestion on the northsouth
line is already having a negative impact
on Austria as an industrial location,
particularly in the provinces of Styria, Salzburg
and Carinthia. Even the Styrian social
partners, comprising the Chamber of
Commerce, the Chamber of Labor, industrial
associations and the Austrian Trade
Union Association (ÖGB), refer to the urgent
necessity of implementing the 380 kV
Styria line in a strategy paper.
They emphasize the importance of a secure
power supply, not only for the industrial
location of Styria but also for private
households. For this reason, the completion
of the 380 kV ring is a priority goal for
APG. This requires the construction of the
95 km long transmission line between the
substations Southern Burgenland and Kainachtal
(»Styria line«) and the 130 km long
transmission line between the substations
St. Peter in Upper Austria and Tauern in
Salzburg (»Salzburg line«).
The environmental impact process for the
Styria line was approved by the authorities
in the first instance as early as 2005. Opponents
of the line appealed the decision and
the process went to the environmental tribunal,
the authority in the second instance,
WHAT CHALLENGES DOES THE GRID OPERA-
TOR HAVE TO CONTEND WITH?
o Increasing electricity consumption
o Shortfall in power plant capacities
o Regional differences between
generation and consumption
o Power plant utilization based on
market prices
o Forms of generation that are difficult
to forecast, e.g. wind power
which also issued a positive decision on 14
March 2007.
The public hearings within the framework
of the EIA process for the Salzburg line
commenced in 2006. In mid-March 2007,
the authorities in the first instance confirmed
the environmental compatibility of
the 380 kV high-voltage line from St. Peter
near Braunau to Elixhausen. The possibility
of this decision being appealed by opponents
of the project cannot be ruled out.
This would inevitably result in the project
being further delayed.
The 380 kV line would make a significant
contribution to sustainability as line losses
would be greatly reduced and wind power
– whether from the north of Germany or
the northeast of Austria – could be integrated
into the Austrian electricity supply
in a much improved manner. In addition,
high congestion management costs could
be eliminated and security of supply could
be restored in Austria.
CONGESTION MANAGEMENT
SWALLOWS MILLIONS
For many years, APG has had to engage in
cost-intensive congestion management to
maintain security of supply. In overload situations,
expensive power plants in the
south have to be connected and cost-efficient
power plants in the north have to be
taken off the grid.
Following the closure of important power
plants in the south of Austria in 2004 and
2006, APG decided at the end of 2006 to
install three phase-shifting transformers in

the grid so as to guarantee secure grid
operations in the next years.
This is unique in Europe as APG is using
these special transformers to equally distribute
the load flows on the three northsouth
lines and create an additional transport
capacity of approx. 200 MW. Thanks
to these transformers, overloads can be
managed in the best possible manner. The
other congestion management measures,
which essentially involve the non-marketprice-oriented
utilization of power plants,
will, however, have to be continued.
TARGETED DISCONNECTIONS
AND/OR MARKET SPLITTING
Against the backdrop of growing electricity
consumption in the next few years and in
view of the fact that the »Styria line« has
not yet been implemented, additional measures
– which are already being prepared –
will have to be taken in two to three years
to protect the transmission grid.
These measures include »Demand-Side-
Management« (DSM). This refers to agreements
with large customers under which
they will, for a consideration, be partly or
totally disconnected from the grid in the
event of grid problems, i.e. the electricity
supply will be interrupted in a targeted
manner, e.g. to reduce demand in the south
of Austria.
A second measure focuses on splitting the
markets in the northern and southern
parts of the APG grid from approx. 2010.
The provinces in the south would then
have to import electricity that cannot be
supplied from the north due to overloading
from Italy and Slovenia.
The low grid capacity on the north-south
lines would then be auctioned off leading
to a price increase of up to 50 % in the
southern provinces. This would correspond
to the high price level in Italy.
APG is making every effort not to implement
either of these measures and will only
do so in the event of an extreme emergency
at a time in which the transmission grid in
Austria cannot be raised to European standards.
TONS OF SECURITY
In 2005, APG had to implement extensive
and capital-intensive congestion management
measures to keep the overburdened
high-voltage grid operational.
In spite of this, the (n-1) criterion (see box
below), which is required to maintain grid
security, could not be met on the 220 kV
north-south lines.
PHASE-SHIFTING TRANSFORMERS
To secure the electricity supply of
Styria and Carinthia at a high-voltage
level over the medium term, VERBUND-
Austrian Power Grid AG (APG) installed
three phase-shifting transformers along
the inner-Austrian north-south lines in
the substations Tauern, Ernsthofen and
Ternitz.
These transformers, which function
similar to a tap, are used to control
the maximum power flow. In this way,
a physical overload on the three weak
lines can be avoided.
Each of the phase-shifting transformers,
which comprise an exciting transformer
and a series transformer, weigh more than
700 tons. For fire protection reasons, they
are equipped with a high pressure water
mist system and noise protection housing.
The transformers were transported from
Germany to Linz by ship in mid-2006. On
arrival in Linz, they were loaded onto 32axle
transformer transport wagons. They
were subsequently loaded onto a special
low-loading truck and transported the
short distance by road to the substations
Tauern and Ternitz.
In December 2006, the phase-shifting
transformers were handed over on schedule
to the central control station Vienna-
Southeast for remote control operation.
Based on the current situation, the implementation
of this € 30 million measure
and the continuation of the conventional
congestion measures – changes in power
plant utilization, sharing the ÖBB grid,
ring operation etc. – should allow to maintain
security of supply for the next two to
three years.
However, due to the steadily growing demand
for electricity, the positive effect of
this emergency measure – which further
increases the large line losses on the northsouth
connections – is only of a provisional
nature.
The international safety standards cannot
be met even after the installation of the
phase-shifting transformers.
Sustainable security of supply and loss reduction
can only be secured through the
completion of the 380 kV Austrian ring,
i.e. the construction of the Styria and Salzburg
lines.
WHAT IS MEANT BY »SECURE«?
The «(n-1) principle» states that a
transmission grid must be operated
in such a way that the failure of the
largest generation unit or the failure
of any element of the grid must not
trigger a chain of subsequent failures
resulting in widespread power cuts.
39

40
IN AN EMERGENCY SITUATION
YOU HAVE TO MOVE FAST
Emergencies do not wait
until you are perfectly
prepared to handle them.
Swift action is the most
important factor in crisis
management.
Power failures cost the economy millions
of euro per hour and also cause great restrictions
for the consumer. VERBUND-
Austrian Power Grid AG (APG) conducted
an extensive crisis scenario in Upper Austria
from 27 November to 7 December
2006 to ensure that it will be in a position
to maintain security of supply or restore
the power supply as quickly as possible in a
crisis situation.
The large-scale crisis scenario, which involved
approx. 100 persons, took place
near Ried im Innkreis (Upper Austria). The
Verbund crisis team, the head of operations
and the team on location comprised
45 employees. In addition employees from
CRISIS SCENARIOS IN VERBUND
2002: Pylon anchoring in a residential
area
2003: Alarm exercise – crisis team
2004: Rebuilding the grid
2005: Pandemic exercise: maintaining
security of supply with only
50 % of the staff
2006: Utilization of replacement lines
the provincial company Energie AG OÖ,
the district administration, the municipality,
the fire brigade, the Red Cross, the police,
the Federal Ministry for Economic Affairs,
the Regional and Federal Alarm Center,
the regulatory authorities E-Control,
the armed forces, the line construction
company and, last but not least, farmers
who transported the necessary materials
with their tractors took part.
The training exercise assumed that three
pylons on the 220 kV line to the west of
Ried became unsettled and collapsed after
a long period of heavy rainfall. Parallel to
this, the 380 kV line in this region was also
damaged as a result of slope movement.
Specially trained APG employees, in cooperation
with a line construction company,
had the task of constructing a temporary
line in just four days while at the same
time maintaining the electricity supply
using the part of the Austrian electricity
grid that was still intact. This was one of
the most extensive scenarios to be tested in
the past years and represented a great technical
and logistical challenge for all participants.
A central element was the testing of the
new APG radio system. As it can be assumed
that the mobile telephony network
will become overloaded very quickly in a
crisis situation and that batteries will be
used up very quickly, the availability of a
robust and reliable communication system
on location is the most important requirement
for effective crisis management.
The new radio system can be used not only
to communicate within the company but
also to make calls to external networks –
e.g. to police and rescue service networks.
The scenario also extended to procedures
for quickly informing the public via the
media.
The experience gained from the scenario,
particularly in the area of crisis management,
is currently being evaluated by the
renowned crisis expert Wolfgang N. Bachler,
the long-serving commander of the
special task force »Cobra«. The findings
will enhance APG’s expertise in the area of
crisis management, above all with regard to
the personnel capacities that are actually
required, the technical development of the
company radio system and communication
procedures.
»The blackout all over Europe at the beginning
of November quickly opened our eyes
to how quickly distant problems can also
effect Austria. This crisis scenario should
help us to react quickly and professionally
in an emergency situation and keep economic
damage at a minimum. Professional
crisis management is an important task
for all companies that have a sense of
responsibility. It is vital, however, that
every possible step is taken to prevent
the outbreak of a crisis. For this reason,
it is essential that the 380 kV line be
completed as quickly as possible to
guarantee security of supply in Austria.«
Dr. Heinz Kaupa, Managing Director of APG

42
INTEGRATED MANAGEMENT
IN THE GRID AREA
In 2005, VERBUND-
Austrian Power Grid
AG (APG) commenced
with the establishment
of a comprehensive
Integrated Management
System (IMS).
Winkeln
*)
Meiningen
CH
380 kV transmission line of APG
Planned 380 kV transmission line of APG
220 kV transmission line of APG
110 kV transmission line of APG
Transmission line owned by AHP
Grid switching station of APG in third-party plants
Substation owned by third party
Substation of APG
Planned substation of APG
Transport rights of APG on third-party lines
Grid Region West:
Environmental Management System
in acc. with EMAS and ISO 14001
Obermooweiler
Bürs
Pradella
Memmingen
Leupolz
Westtirol
Roßhag
5 0 10 20 3040
50km
Bösdornau
*)
I
By adhering to international standards, this
organizational framework allows the company
to achieve continuous and systematic
improvement in the areas of work safety,
environmental and health protection as
well as quality and information security.
Defined projects and quantifiable goals
form the core of this management system.
In the substation Tauern, for example, own
consumption of electrical energy was reduced
by 25 %.
Zell am
Ziller
Mayrhofen
*) Hausling
The high-voltage grid of Verbund with the certified Grid Region West
Altheim
Simbach
Neuötting
D
TAUERN
Soverzene
Braunau
Pleinting
Pirach
Ranshofen
Salzach
Lienz
Ponga u
Ering
Passau
Arthurwerk
Schwarzach
Kaprun
Hauptstufe
Energie AG
Reißeck
Malta Hauptstufe
Malta
Unterstufe
Steinfeld
Kamering
^
Jochenstein
Klaus
Pyhrn
Weißenbach
Großraming
Steweag-Steg
OBER-
SIELACH
Steweag-Steg
Hessenberg
Zeltweg
Bad St.
Leonhard
The implementation of the project »Sustainable
Route Management«, which commenced
in 2006, not only forms a scientific
basis for the ecological construction of
high-voltage lines, but also serves as an example
for all infrastructure facilities in Austria.
The safety and health of the employees can
also be enhanced through the continuous
evaluation of plants; processes and faults,
which could have a negative impact on the
environment, can be prevented before they
occur.
Wolfsberg
St. Andrä
Steweag-Steg
VölkerLandsmarktkron
Klagenfurt
Rosegg
Schwabeck
Bleiburg Lavamünd
Feistritz Edling
Podlog
Steweag-Steg
Kainachtal
Slavetice
Südburgenland
Oststeiermark
Maribor
SLO
Ternitz
CZ
Ebenfurth
^
^
Wr.
Neustadt Neudörfl
Sokolnice
^
^
^
^
^
^
Schärding
Aschach
Aigerding
Chemie
Linz I
Abwinden/
Melk
Egglfing
Ybbs-PersenOttens-
Asten
beugheim
Hütte
*)
Linz
Enns Wallsee
Industrie
Bergern
St. Peter
Wegscheid
Hausruck ERNSTHOFEN Ybbsfeld
Sattledt
Altenwörth
Bisamberg
*)
Greifen-
Dürnrohr stein Korneuburg
KW Dürnrohr
Wien Kledering
Etzersdorf
West
WIEN
SÜDOST
Rosenau
Ebreichsdorf Neusiedl
SK
H
Györ
Györ

Biotope in substation Lienz
ENVIRONMENTAL, SAFETY AND
HEALTH MANAGEMENT SYSTEM
The Environmental Management System
of substation Tauern has been certified in
accordance with ÖNORM EN ISO 14001
since 1998 and was awarded the EMAS
Prize in 2005. In 2006, the Environmental
Management System was extended with a
Safety and Health Management System in
accordance with OHSAS 18001 and introduced
to the entire Grid Group West which
comprises 11 substations and 860 km of
high-voltage lines.
Moreover, both management systems will
be introduced and certified in the grid regions
North, and East in 2007. The APG-
wide anchoring of the Environmental,
Safety and Health Management System in
accordance with ÖNORM EN ISO 14001,
the EMAS Directive and OHSAS 18001 will
be completed in 2008.
QUALITY MANAGEMANT SYSTEM
A certified Quality Management System in
accordance with ÖNORM EN ISO 9001
was introduced at the main control center
Vienna-Southeast in 2005.
In 2006, APG was reorganized so that it is
now in a position to meet future challenges,
above all in the areas of security of
supply and grid marketing. This new struc-
ture not only considers the alignment of
the business processes and the grouping of
these processes to form value-added segments
(grid operation, plant management
and plant services as well as grid marketing)
but also provides for the areas »grid
security« and »market management«. By
2008, all areas of APG will be equipped
with a certified Quality Management System.
In addition to the existing systems, specific
information processes will be certified in
accordance with ISO/IEC 27001 (information
security management).
By 2008, all management systems will be
implemented and combined to form an Integrated
Management System.
43

REDUCTION OF
GREENHOUSE GASES
1 January 2008 will
finally mark the start
of the worldwide
Kyoto trading system.
This also has far-reaching effects for the
European emission trading system as the
Kyoto mechanisms »Joint Implementation«
(JI) and »Clean Development« (CDM)
will also be applied in the European trading
system. Each of these mechanisms has
to be implemented by way of cooperation
between at least two countries that have ratified
the Kyoto Protocol. The aim is to finance
projects which have been proven to
reduce greenhouse gas emissions. The project
location determines whether the JI
mechanism (project location is an industrial
country) or the CDM mechanism
(project location is a developing country)
will be used. The exact criteria for recognition
as JI or CDM projects are defined in
the Kyoto Protocol as well as in the supplementary
decisions of the annual conferences
of the Kyoto countries.
The mechanisms aim at strengthening
global cooperation in reducing greenhouse
gas emissions. This requires that a certain
amount of capital be available. The
developing countries, however, the countries
with the greatest learning potential,
do not have the necessary capital. For this
reason, the CDM projects have the function
of establishing a bridge between capital
and potential and reducing greenhouse gas
emission in areas where this proves to be
most effective. This not only improves the
efficiency of the market activities in the
area of greenhouse gas trading but also
promotes the transfer of technology. To
guarantee that CO 2 reductions are also
realized within the EU in spite of the fact
that emission rights can be purchased via
the JI/CDM program, the EU Emission
Trading System has introduced a quota system
for the utilization of JI/CDM: the exact
percentage is defined by the member
states of the EU-25 but may not exceed 50 %
of the allocation.
The JI/CDM quota for Austrian power
plant operators in the EU Emission Trading
System has not yet been fixed at the
time of going to print. At the beginning of
2006, VERBUND-Austrian Thermal Power
GmbH & Co KG (ATP) secured its procurement
program for the utilization of
the flexible JI/CDM mechanisms and
signed an agency agreement with the climate
protection fund of the Kreditanstalt
für Wiederaufbau (KfW) in Frankfurt. Under
this agreement, ATP undertakes to purchase
emission rights from JI/CDM up to a
specified amount with delivery up to 2012.
Here, KfW acquires the certificate in trust
in its own name for account of the customer.
In this way, ATP can purchase certificates
directly from the investor without
having to go through the secondary market
and, in doing so, can reduce transaction
costs to a minimum.
For ATP, the utilization of JI/CDM is not
just a cost-optimized measure to meet the
CO 2 accountability requirements. ATP also
actively supports international cooperation
in the area of climate protection and also
makes an important contribution to the
promotion of sustainable resource utilization
in developing and threshold countries.
To date, projects in the energy area such as
the construction or renovation of hydropower
plants in India and China and the
establishment of wind parks in India and
Egypt have been prioritized. The projects
that have been financed by APT to the
present date reduce greenhouse gas emissions
by more than 100,000 tons CO 2 per
year (as of September 2006). Further projects
are currently in the planning phase.
KREDITANSTALT FÜR WIEDERAUFBAU
(CREDIT INSTITUTE FOR RECONSTRUCTION)
The Kreditanstalt für Wiederaufbau
(KfW), which has its headquarters in
Frankfurt, is primarily involved in export
and project financing, the promotion of
developing and reform countries as well
as projects that focus on environmental
and climate protection. KfW
promotion aims at sustainable development
that will also secure better living
conditions and enhanced quality of life in
the future. The KfW Development Bank
helps the public sector in developing and
transformation countries to expand the
social and economic infrastructure and
also provides support in the area of
environmental and resource protection.
KfW aims to bring about a lasting
improvement in the living conditions of
the people in developing countries. Central
tasks include: fighting poverty,
strengthening the sustainable economic
efficiency and supporting structural
change. Further details can be found
under www.kfw.de.
45

46
ELECTRICITY FROM
100 % HYDROPOWER
BOOSTS COMPETITION
MORE AND MORE ELECTRICITY
CUSTOMERS ARE MOVING
TO VERBUND
The youngest group subsidiary, VER-
BUND-Austrian Power Sales GmbH
(APS), has been operating on the Austrian
market since July 2005 and is committed to
boosting competition in the Austrian electricity
market. For the very first time, electricity
consumers in Austria now have a
real alternative to their normal supplier.
Offering a very attractive electricity price,
APS managed to attract 60,000 customers
in 2006. The prospects for the coming
years are excellent. This rapid growth is
attributable not only to the attractive pricing
but also to the business model that is
employed by Verbund’s direct distribution
company for private and commercial electricity
sales. With a lean distribution structure,
a uniform electricity price throughout
Austria and targeted communication measures,
APS attracts an average of 4,000 new
customers every month. The APS products
are marketed under two strong selling propositions:
Electricity from 100 % hydropower and an
attractive electricity price that is uniform
nationwide. Electricity price comparisons,
which show the Verbund energy price as
well as the fixed costs for grid, taxes and
levies compared to the prices of the other
electricity providers, form the core of the
company’s transparent customer information
program. In 2006, the APS team created
no less that 24,000 of these clear and
easily comprehensible price comparisons.
At the beginning of 2006, APS commenced
activities in the business and industrial
customer segment and achieved annual
sales of 2.5 terawatt hours. Well-known
corporations, industrial companies and
groups recognize the advantages of a partnership
which offers the entire value chain
and the trading expertise of the Verbund
Group together with high commitment in
the area of sustainability. Long-term business
relationships up to 2010 confirm that
APS is on the right path. These relationships
are based on flexible purchasing
times and innovative customer-friendly
products.
APS has a streamlined leadership structure
and a very young team – the average age is
THE ELECTRICITY OFFER OF APS CAN BE
DIVIDED INTO TWO CATEGORIES:
o Annual electricity consumption up to
100,000 kWh (Standard load profile)
o Annual electricity consumption over
100,000 kWh (individual offers)
In the case of the standard load profile, a
favorable, uniform price is fixed for annual
electricity consumption up to 100,000 kWh.
This segment includes private customers,
agricultural customers and SMEs.
The electricity supply agreements for
standard load profile are standardized and
processed via direct sales. In the business
and industrial customers segment for customer
with an annual electricity consumption
in excess of 100,000 kWh, the offers are
based on the respective consumption
situation of the company and the prices
on the electricity exchanges. This segment
is extremely consulting-intensive and
customers receive individual support
from key account managers.
33 – in which women account for a share
of 54 % and men a share of 46 %. A total of
20 additional jobs were created and the
employees have – as is normal within the
group – already elected a works council. All
APS employees do, of course, also have access
to the social benefits that are offered
within the group, such as the extensive
training program, health care, lunch etc.
It is expected that the number of private
and commercial customers will continue to
increase strongly in 2007. Targeted marketing
and communication measures – based
on customer and consumer surveys – will
further boost competition in the Austrian
electricity customer segment and provide
consumers with a real alternative.
The new Verbund website offers customers
a simple and fast way of processing all customer-related
matters, from name and
database changes to address changes and
deregistration. Online forms and downloads
are available for this purpose. Details
on how easy it is to switch to Verbund and
what goes on in the background can be
found under www.verbund.at along with
detailed tips on filling out agreements, an
electricity dictionary and answers to the
most frequently asked questions. In addition
to favorable prices and an easy changeover
procedure, Verbund offers yet another
service: energy saving tips. The Verbund
website has an information platform which
contains a game and a summary of all
energy saving tips as a download. A free
Verbund service line has been set up for
potential customers who require advice
when changing suppliers or who require
assistance in filling in the agreement.
135,000 calls were made to the service line
in 2006.

TÜV Certificate
Verbund has long established its position
as one of the most environmentally friendly
producers of electricity and plays a pioneering
role in the area of hydropower certification.
Since 1999, all of the electricity
that Verbund generates from 100 % hydropower
has been certified. Verbund’s
electricity from 100 % hydropower is generated
exclusively in run-of-river and storage
power plants as well as from natural inflows
from pumped-storage power plants
and certified by TÜV SÜD (South Germany).
CMS Standard 83
Erzeugung EE
SUD
Erneuerbare
Energien
Labelling
Verbund provides details relating to electricity
labelling and the supplier mix in all
its invoices, product brochures and offers
in the Internet.
Electricity labelling in accordance with
§ 45 and § 45a ELWOG (Electricity Industry
and Organization Act)
APS electricity is generated from 100 %
hydropower. As a result, there are no CO 2
emissions or radioactive waste.
Energy saving tips of APS on the Internet: www.energiespartipps.at
SATISFIED CUSTOMERS –
THAT’S WHAT COUNTS
At the beginning of the deregulation process,
the opening up of the Austrian electricity
market had little or no effect on
competition between the electricity suppliers
in the household and commercial
customer segment. Verbund’s involvement
in the end customer segment with the subsidiary
VERBUND-Austrian Power Sales
(APS) from 2005 on brought more movement
into the market.
APS provides the customers with clean and
comprehensive information and has triggered
a change in the long established behavioral
patterns in the Austrian electricity
consumer segment: the regional supplier is
no longer accepted as being the only provider
of energy supply services. With unbeatably
attractive prices, a well structured
product portfolio and a service that makes
it very easy for customers to change their
supplier, APS has convinced a growing
number of customers to change their electricity
supplier over the last one and a half
years.
According to E-Control, only 23,000 customers
in Austria changed to an alternative
electricity provider in 2004/2005. Due to
the founding of APS, more than twice this
number moved to Verbund in 2005/2006.
A customer satisfaction survey carried out
by marketmind for 2006 revealed that this
change is attributable to the energy price,
the customer support and the environmentally
friendly energy generation. APS is the
only electricity supplier among all the suppliers
listed in the E-control tariff calculator
to keep the energy price at the same low
level over one and a half years and not to
introduce a price increase up to the end of
2006. The APS services for potential and
existing customers include a free electricity
price comparison, advice on changing suppliers
via the free Verbund service line, assistance
in filling out agreements – which is
welcomed, above all, by older people – as
well as the execution of all further steps
that are necessary to change supplier.
The competition is not very happy about
this: competitors instigated legal proceedings
in an attempt to dampen the success
of APS. These proceedings are still ongoing
at the time of compiling this Sustainability
Report. At APS, the transparent presentation
of customer advantages remains at the
center of all communication activities.
The Verbund service line also offers potential
customers the possibility of filling out
the agreement on the basis of their last annual
statement. When all the required details
have been entered, the customer does,
of course, receive a paper copy of the document
which is ready for signature. The customer
also receives written information on
every important step in the changeover
procedure and is therefore always aware of
the current state of progress. According to
marketmind, customer satisfaction and
loyalty among private and commercial
customers are therefore also at a very high
level, averaging around 90 %.
APS’s primary aim is to transform consumers
who are willing to change into wellinformed
and totally convinced Verbund
customers. To achieve this, quantitative
market evaluation measures are implemented
along with measures that are designed
to further increase the quality of the
customer relationships.
47

ELECTRICITY AND WATER
FOR SRI LANKA
In the morning of
26 December 2005, a
tidal wave destroyed the
coast of Sri Lanka over
a length of 60 km. More
than 35,000 people
drowned or were killed
in collapsing houses.
Tens of thousands of
fishing boats and
100,000 houses were
destroyed thus eradicating
the livelihood
of citizens on the coast.
The tidal wave did, however, trigger a wave
of help throughout the world: numerous
aid organizations collected donations and
commenced with the reconstruction work.
Swift progress was made in the economically
and politically stable south. A team
from Kurier Aid Austria (KAA) indepen-
dently organized the construction of approx.
400 houses, schools and community
centers etc.
A new village was created with 380 houses
of various styles. All villages have social facilities
such as a community house, a kindergarten
and a playground. The houses,
which are built to local, medium-class
standard, all have electricity, a water supply
and have been signed over together with
the site to the families that occupy them.
Social tension between the families that are
supported by KAA and their neighbors is
eased by way of special campaigns for the
entire community – regardless of whether
they are flood victims or not.
The situation in North and East Sri Lanka
is, however, quite different. Here, civil warlike
conditions prevail due to the ethnic
conflict between the Singhalese, the Tamils
and the Muslims. The area is very difficult
to reach and, even before the flood, it had a
poor economy, a poorly developed infrastructure
and a very low level of prosperity.
For this reason, two »Peace Villages« were
set up by the Institute for Peace and Conflict
Research (IICP) in Vienna.
The practical implementation of this project
with over 300 houses was conducted by
Sarvodaya, the largest self-help organization
in Sri Lanka. KAA does, however,
retain control of the funding.
The third-largest KAA project, also in the
east of the island, involves three health stations
and a medical information system in
the province of Batticaloa. The Austrian
Red Cross is responsible for the implementation
of the project and the province of
Lower Austria, Uniqa and KAA provide the
financial support.
THE TSUNAMI OF 26 DECEMBER 2005
At the end of 2005, a seaquake off the
island of Sumatra in the Indian Ocean
with a strength of 9.3 on the Richter
scale, the third strongest ever recorded,
triggered one of the worst Tsunami catastrophes
in history. At least 231,000
people were killed in Sumatra/Indonesia,
Sri Lanka, India, Thailand, Myanmar,
Maldives, Malaysia and Bangladesh.
The tidal wave also travelled thousands
of kilometers to East and Southeast
Africa and further deaths were recorded
in Somalia, Tanzania, Kenya, South
Africa, Madagascar and the Seychelles.
49

50
Members of the reconstruction team on location
KAA attaches great importance to finding a
sustainable solution for the living situation
of the local citizens. For this reason, KAA
built the new villages close to the original
habitat of the people.
In the beginning, the »Buffer Zone Regulation«,
under which buildings in the south
and east could only be constructed at a distance
of 100 m and 200 m respectively
from the coast, proved to be an obstacle.
The first reconstruction work was even
carried out at a distance of 5–10 km from
the sea. These villages, however, were only
occupied very slowly. The »Buffer Zone Regulation«
was abolished within the course
of the election campaign 2005 and buildings
can now be constructed on the coastal
strips.
KAA also attaches great importance to the
quality of the houses. The contractors are
required to comply with specific building
standards so that, at a minimum, the next
generation will also be able to live in the
houses.
VERBUND IN SRI LANKA
Within the framework of the KAA project,
Verbund donated € 500.000 to provide
electricity for the Austrian villages and
drinking water and sanitation facilities for
over 400 houses in South and East Sri
Lanka.
In the process, Verbund also tried to implement
higher safety standards. Prior to the
catastrophe, the electricity supply was often
»shared« within the community by
using copper wires to tap electricity from a
number of registered consumers. The
safety risk was reduced through the introduction
of professional electricity lines.
In Sri Lanka, time, deadlines and agreements
appear to have less relevance than in
Central Europe. This was very clear at the
opening of the new village Katugoda on
17 August 2006: Verbund project leader
Dipl.-Ing. Reinhard Enzenebner arrived at
the village on the day before the festivities
and found electrical installations in the
houses and electricity meters on the outside.
All were in perfect working order. There
was, however, no electricity line into the
village.
With the help of the head of construction,
Manfred Cicek, a provisional line was installed
to ensure that the opening celebration
the following evening did not have to
take place in the dark.
When he returned to Colombo, Dipl.-Ing.
Enzenebner – after long negotiations with
Chula Delgoda, the CEO of the public
energy utility CEB – finally managed to secure
a permanent power supply to the village.
The line was completed a week later.
In addition to financial assistance and expertise,
a high level of personal commitment
is also vital to bring projects to a successful
conclusion.
KURIER AID AUSTRIA
»Kurier Aid Austria« (KAA) was established
in January 2005 by the Kurier
newspaper. Together with the partners
Raiffeisen and Uniqa, the financial pillar,
the Austrian building industry, the technical
pillar, and the Red Cross, the organizational
pillar, KAA aims to support the
reconstruction work with donations from
Austria.
KAA provides immediate catastrophe
assistance as well as sustainable development
aid. In addition to the reconstruction
of 700 houses, KAA has therefore
also made sustainable investments in
education, health, social facilities,
culture and the economy.
KAA provides assistance for different
regions and for all ethnic and religious
groups – Singhalese, Tamil and Muslim.
All the planning and implementation
work is carried out in close cooperation
with the local authorities. The projects
are, however, controlled and budgeted
by KAA.
Workers and materials are hired/purchased
exclusively in the country and
external assistance is restricted to the
provision of know-how and the required
funds in the amount of € 12 million.
Verbund, one of the main sponsors, is
responsible for the electricity supply
to the new villages and has donated
€ 500,000 to this end and supplied
expertise and manpower.

TO SEE A CHILD SMILE
In 1989, Verbund
decided to sponsor –
for an unlimited period –
the children of the Hans
Radl School, which is
located in the 18 th District
of Vienna. This
school provides education
and therapeutic
care for physically
handicapped children.
The school celebrated its 30 th anniversary
in 1989, on which occasion it was officially
named after its founder and member of the
Government Council, Hans Radl.
The annual financial contributions of Verbund
are transferred to the account of the
parent’s association. The funds are administered
by the parent’s association and used
for various projects that are approved by
the association.
The following acquisitions and projects
were supported in the last years:
o Project weeks, sometimes taking place
abroad, the costs of which could not be
covered by the parents alone. Many of
the handicapped children come from
socially disadvantaged families who are
not well off financially.
Relaxed and confident on a horse – an important step for the development of communication skills
o Therapeutic horse riding, which has a
positive impact not only on physical
development but also on speech development,
and is not included in the free
therapeutic activities offered by the
school.
o A candle dipping machine, which provides
another possibility for creative
design. This is an important feature of
the school’s activities that is much loved
by the children. It also prepares the kids
for their later working life in a sheltered
workshop.
o The annual summer sports and school’s
out party.
FROM IDEA TO REALITY
During the First Word War, Hans Radl
became a war invalid and was treated in
a hospital that also catered for physically
handicapped children. Having trained as
a teacher, he started to teach these »cripples«
– as they were called in those days –
in the hospital. Combining therapeutic
care and school training under one roof
gradually became his mission in life. As
a School Inspector for Special Needs
Education, he completed the final chapter
of his life’s work with the construction of
the Hans Radl School.
51

52
RATIOS AND KEY FIGURES
IN THE THREE SUSTAINABILITY AREAS
ECONOMIC INDICATORS
Fiscal 2006 was the best
year in the history of
Verbund. Sales increased
by 34.9 % to € 2,878.2
million and the operating
result also improved
disproportionately
by 53.0 % to € 806.5
million. The group
result grew by 43.5 %
to € 501.1 million.
The share also achieved double-digit
growth. These positive developments are
the result of the reorganization measures
which were implemented over many years
and completed in 2005. This success is also
SALES ACCORDING TO COUNTRIES GWh
2005 2006 Change
Germany 20,842 24,630 18.2 %
Austria 24,355 22,508 -7.6 %
France 3,753 3,962 5.6 %
Slovenia 1,895 2,240 18.2 %
Italy 917 1,499 63.5 %
Other 659 516 -21.7 %
Group sales 52,420 55,354 5.6 %
attributable to the clearly defined strategy
which aims at achieving continuous, sustainable
growth and enhancing profitability
on an ongoing basis. Today, Verbund is
a modern, international energy group that
sets standards in many areas.
The goals for the coming years are clearly
defined: expansion of own generation,
modernization of transmission grids,
achievement of a strong foothold in the
end customer segment and sustainable
profit in Europe. Verbund is well equipped
to meet these challenges in the Austrian
and in the European market.
BASIC CONDITIONS
Mergers and takeovers
The possibility of a second wave of consolidation
among Europe’s electricity suppliers
was already identified in 2005. In the
meantime, the wave of takeovers and mergers
is well under way and has reached proportions
that would have been hard to
imagine just a couple of years ago. An end
to this market shakeout is not yet in sight
and the ultimate consequences of this concentration
process are difficult to estimate.
The vision of a large, open, highly competitive
pan-European market in which the
major supply companies have little influence
has not yet been realized. The year was
also marked by the activities of companies
such as the Russian supplier Gazprom
whose interest in the European market may
extend far beyond the maximization of
profits and whose corporate policies are, at
least in the present situation, very difficult
to assess. At present, the demand for gas in
the European Union is covered to 50 % by
imports from Russia. The EU expects that
this share will increase to 80 % in the next
25 years – a prospect that painfully highlights
the absence of a uniform European
energy policy.
Increasing prices
All in all, fiscal 2006 was characterized by
further increases in the wholesale prices,
particularly on the forward market. The
price development on the spot markets
was, on average, equally positive but was
characterized by a high level of volatility.
Above all, the decline in the prices for CO 2
emission rights in quarter 2/2006 and the
deterioration of the oil prices in quarter
4/2006 led to a clear drop in prices on the
spot market.
Security of supply guaranteed?
In November of the year under review,
there were power failures in many parts of
Europe which also affected parts of Austria.
These power failures triggered intense
discussion on the security of the electricity
supply in Europe as well as on the capacities
and investments that would be necessary
in the future. Reference was repeatedly
made to the fact that the reserve capacities
SALES ACC. TO CUSTOMER GROUPS GWh
2005 2006 Change
Traders 21,938 26,264 19.7 %
Resellers 24,896 22,794 -8.4 %
End customers 3,498 4,190 19.8 %
Own consumption 2,088 2,106 0.9 %
Group sales 52,420 55,354 5.6 %
Forward contracts 42,987 47,507 10.5 %

ECONOMIC INDICATORS
had fallen to just 4.6 % in spring 2006 and
that the European grid was highly susceptible
to blackouts. This situation was made
more precarious through the changes in
consumer behavior:
The traditional consumption peak in the
winter months was accompanied by a peak
in the summer months on account of the
increased utilization of air conditioning
devices. The low reserve levels were interpreted
as a signal to increase investment in
power plant construction and grid expansion.
Austrian suppliers were also criticized following
the November blackout in spite of
the fact that security of supply has already
been a primary focus of attention for many
years in Austria, particularly in the grid
area. The completion of the 380 kV ring
Unit 2004 2005 2006 Comment
Sales € million 1,712.0 2,134.4 2,878.2 Due to the discontinuation of the eco-electricity activities, only continued
operations are shown. The figures for the previous year were adjusted.
Sales growth in 2006 was essentially attributable to the realization of
increased market prices.
Operating result (EBIT) € million 386.0 527.0 806.5 The positive business development is based on the strong position that has
been established with regard to wholesale activities and consequent cost
management.
Profit for the period € million 235.4 349.3 501.1 The growth in profits before income taxes is offset by € 72.1 million increase
(excluding minority interests) in tax expenses. In addition, the share of minority interests in profit increased.
Economic Value Added (EVA) € million 64.5 201.8 346.4 The positive business development led to an improvement in the EVA and
an increase in value.
Net gearing % 141.6 97.4 74.1 The further reduction of the net interest-bearing debt combined with an increase
in shareholder’s equity paved the way for a lowering of the net gearing.
Earnings per share € 0.76 1.13 1.63 On 23 May 2006, a stock split was carried out in the ratio of 1 : 10.
Compared to the previous year, the EPS increased by 44 %.
Carrying amount per share € 5.19 6.18 7.44 The shareholders’ equity rose by almost 20 %.
Cash flow per share € 1.42 2.21 2.45 The clear increase in the cash flow clearly reflects the financial power of
Verbund.
Dividends per share € 0.30 0.50 0.75 The dividend distribution was raised for the seventh time in succession and
reflects an increase of 50 % for fiscal 2006.
Payout ratio % 39.26 44.12 46.13 The planned payout ratio was raised by 4.6 %.
Dividend yield % 1.83 1.66 1.86 The dividend yield rose on account of the higher dividend payout.
Closing price of € 16.39 30.13 40.42 With a performance of +34.2 %, the Verbund share developed well ahead of
Verbund share 31.12. the ATX and is therefore one of the best performers among the listed utility
stocks worldwide.
Electricity sales GWh 81,911 95,407 102,861 Before netting for external-electricity trade (after netting: 2006: 55,354 GWh,
2005: 52,420 GWh, 2004: 47,767 GWh).
and the technically challenging Limberg II
construction project at the Tauern power
plant in Kaprun are just two examples of
Verbund’s ongoing investment policy.
In spite of the growing uncertainty in the
market, Verbund managed to further
strengthen and expand its strong position
at a national and international level.
DEVELOPMENT OF
KEY FIGURES AND RATIOS
Sales revenue increased from € 2,134.4
million in 2005 to € 2,878.2 million in fiscal
2006. This is equivalent to an increase
of 34.9 %. The earnings ratios, which display
a disproportionate improvement compared
to sales, are particularly positive. The
operating result rose by 53.0 % from
€ 527.0 million to € 806.5 million. Profit
after taxes climbed from € 402.1 million in
2005 to € 608.7 million in 2006. This is
equivalent to an improvement of 51.4 %.
The group result comes to € 501.1 million
compared to € 349.3 million in the corresponding
period the previous year. This
corresponds to a growth rate of 43.5 %.
The expenses for active and former employees
in the amount of € 276.4 million
included in the operating result (previous
year: € 343.5 million) sank on account of
unscheduled increases in balance sheet
provisions, for, among others, an addition
of funds to cover investment losses for settled
pension entitlements. The current outflows
for active and pensioned employees
are € 52.4 million higher than in the previous
year at € 317.8 million. About one
quarter of these outflows were for em-
53

54
PRICE DEVELOPMENT OF VERBUND SHARE
140
130
120
110
100
90
01.01. 2006 31.12.
ployees in semi-retirement, pensioned employees
or their surviving dependents.
In fiscal 2006, the Economic Value Added
(EVA), the control-specific ratio for value
creation within the Verbund group, increased
by 71.7 % to € 346.4 million. The
capital structure, measured on the basis of
net gearing, was once again improved significantly
in 2006 to a value of 74.1 %
(previous year: 97.4 %). The ongoing debtclearing
policy paved the way for a € 156.3
million drop in the interest-bearing net
debt to € 1,699.4 million. The shareholder’s
equity rose to € 2,292.7 million
on account of the positive business development
(previous year: € 1,904.9 million).
Verbund
DJ STOXX Utilities
The operating cash flow also improved
from € 680.5 million to € 753.9 million.
Verbund feels an obligation towards its
employees even after they have left the
company and makes pension payments.
These are, in part, based on plant agree-
COVERAGE OF PENSION OBLIGATIONS € million
Pension obligations 2005 2006
Present value of obligations covered by fund assets 163.2 168.8
Market value of plan assets -156.5 -157.6
Net value of obligations covered by fund assets 6.7 11.2
Present value of obligations not covered by fund assets 263.1 258.7
Other post employment benefits
ATX
+34.2 %
Verbund share
269.8 269.9
Present value of obligations not covered by fund assets 103.1 128.3
Obligations not covered by fund assets 372.9 398.2
ments and individual contracts with a defined-benefit
pension system. A definedcontribution
pension system has been set
up for the remaining employees.
These defined-benefit pension obligations
of Verbund are partially offset by the pension-fund
assets which are earmarked for
this purpose. To the extent that these defined-benefit
obligations must be met by
the pension fund, the employer is obliged
to make contributions in case there are insufficient
pension fund assets.
In the defined-contribution system, Verbund
makes payments in the amount of
3 % up to the maximum contribution basis
under social insurance law and pays 15 %
of the basic income on the excess amount.
The employee can make voluntary contributions
up to the amount of the employer’s
contribution.
The employees also benefit from supplementary
health insurance where premiums
are paid by the employer and the employee.
The subsidies on the premiums
paid by the employer after the date of retirement
are recognized as other post-employment
benefits.
The pension obligations and other postemployment
benefits are partially covered
by plan assets (fund assets of pension
fund).
The majority of the obligations not covered
by fund assets are covered by securities.
With an annual performance of +34.2 %,
the Verbund share was once again one of
the top performers among the listed European
utility stocks in fiscal 2006. Hence,
the Verbund share developed ahead of the
ATX. The clear increase is attributable to
the strong position Verbund has established
in the European electricity market.
High earnings growth, the continued high
level of interest displayed by investors in
utility stocks and the positive environment
were, as in the previous year, the main
drivers behind the excellent share performance.
Stock exchange turnover in Verbund
shares reached € 5,500.7 million. On
average, 592,491 shares were traded every

SOURCE OF FUNDS 2006
day. As of 31 December, Verbund had the
fifth highest valuation of all companies
listed on the Vienna Stock Exchange. The
total value derived from the market capitalization
of the company came to
€ 12,457.4 million, the weighting at the
ATX was 4.6 %.
STRATEGY
The Verbund strategy aims at achieving
continuous, sustainable growth and enhancing
profitability on an ongoing basis.
In Austria, this growth is achieved through
consolidation on the supplier side or
through direct involvement in end-customer
business. The expansion of generation
capacities in the hydropower area as well as
in the thermal power plant area offers further
growth potential in the Austrian market.
Today, Verbund operates successfully
in all of the named areas and will continue
to intensify its activities. Verbund has
adopted a strategy of asset-supported electricity
trading for its foreign activities.
The entry into foreign markets follows an
established and preferred pattern which
makes it easier to calculate the risks: Verbund
familiarizes itself with the market
through its trading business and then acquires
a stake in a locally-based energy
company. The third step involves setting up
own generation capacities or securing electricity
procurement rights that can be sold
in the respective country. To control its
growth-oriented foreign activities, Verbund
has defined and prioritized its target mar-
€ million Share
Electricity revenue 2,535.8 88.1 %
Grid revenue 268.2 9.3 %
Other revenue 74.2 2.6 %
Customers 2,878.2 100 %
kets. The top priority target markets are
Turkey, Greece, Macedonia and Romania.
Shareholdings are currently being set up in
Turkey and Greece. Macedonia and Romania
are still trailing in economic terms
and, at present, hydropower resources are
only being used to a very small extent.
Hence, there is also great potential for Verbund
in this area. Target markets at priority
level 2 include Bulgaria, Croatia, Bosnia,
Serbia, Russia and the Ukraine. These markets
will be processed when favorable opportunities
arise.
APPROPRIATION OF FUNDS 2006
POSITIVE OUTLOOK FOR 2007
In fiscal 2006, Verbund massively exceeded
the ambitious goals that were defined for
sales, operating result, earnings per share,
net gearing and economic value added. We
expect that the business development will
continue to be positive in 2007 in spite of
the growing regulatory pressure at national
and international level and the increasing
uncertainty with regard to the development
of the wholesale prices for electricity.
Contact:
Mag. Andreas Wollein
Tel. +43 - (0)503 13 - 52 604
E-mail: andreas.wollein@verbund.at
€ million Share
Electricity and grid purchases 1,402.7 49 %
Fuels 98.8 3 %
Other operating expenses 182.6 6 %
Payroll costs 276.4 10 %
Interests and similar expenses 143.9 5 %
Dividends 154.1 5 %
Changes in shareholder’s equity 442.1 15 %
Income taxes 177.6 6 %
€ million Share
Suppliers 1,684.1 59 %
Taxes 177.6 6 %
Investors 740.1 26 %
Employees 276.4 10 %
55

56
ENVIRONMENTAL AND RESEARCH INDICATORS
Environmental protection
and research are
tasks that are firmly anchored
in the corporate
principles of Verbund.
An effective Environmental Management
System ensures that high environmental
standards can be maintained within the
group. More than half of all locations have
been audited in accordance with EMAS
and ISO 14001. This ensures that all environmentally
relevant measures and ratios
are defined, audited and – if technically
possible – continuously improved on an
annual basis. Our research is strictly practice-oriented.
We concentrate on issues
that arise in power plant and grid operations.
We also participate in European projects
so as to extend our expertise in the
area of renewable energy sources and support
strategic corporate decisions.
ENVIRONMENT
Auditing and certification
Monitoring and expansion audits were carried
out at the hydropower plants of VER-
BUND-Austrian Hydro Power AG (AHP).
The certification of several power plant
groups was completed within the framework
of these audits: the Lower Danube
power plant group with the power plants
Ybbs-Persenbeug and Nußdorf, the Drau
power plant group with the power plants
Edling, Schwabeck and Lavamünd and the
Kaprun-Salzach power plant group with
the four power plants on the Salzach from
Schwarzach to Wallnerau are now completely
certified.
In total, 31 of the 107 hydropower plants of
Verbund are audited in accordance with
EMAS (28.7 % of the hydropower plants,
which corresponds to 42.2 % of the standard
capacity) and 62 are certified in accordance
with ISO 14001 (57.4 % of the
hydropower plants, which corresponds to
49.6 % of the standard capacity).
Moreover, the three thermal power plants
currently being operated by VERBUND-
Austrian Thermal Power GmbH & Co KG
(ATP) are certified in accordance with
EMAS and ISO 14001. This is equivalent to
100 % of the thermal power plants that are
available. At VERBUND-Austrian Power
Grid AG (APG) the Environmental Management
System of substation Tauern in
accordance with ISO 14001 and EMAS was
expanded to the entire Grid Group West
and extended by the Safety and Health Management
System OHSAS 18001. The main
control center was also certified in accordance
with ISO 9001. In addition, APG is
currently setting up an Integrated Management
System (IMS) which, apart from environmental
aspects, will also consider
quality, safety and health aspects (see also
page 42).
Notes on the development of individual
indicators in the environment area
Notes on individual ratios from the table as
well as on indicators from the new G3
Guideline, which is described in detail in
the annual environmental and research
data of Verbund, can be found below.
Energy
Auxiliary consumption refers to the volume
of electricity we need to operate our
power plants. This comes to approx. 1 % of
gross generation at hydropower plants and
approx. 8 % of gross generation at thermal
power plants. Energy consumption is system-related
and is very difficult to reduce,
particularly in the case of thermal power
plants. Lignite consumption is significantly
lower than in the previous years. This is attributable
to the fact that the power plant
Voitsberg 3 was put in reserve in May 2006.
The closing down of Voitsberg also has a
positive effect with regard to emissions of
air pollutants and residues.
Emissions
Direct and indirect greenhouse gas emissions
(G3 indicator EN16): the direct CO 2
emissions can be found in the ratios table.
Indirect emissions – e.g. emissions from
Verbund’s vehicle fleet and business trips –
are insignificant compared to the direct
emissions and are therefore not stated at
this time.
Water
The high consumption of drinking water
in the hydropower plants is caused by an
official obligation of Ennskraftwerke AG.
The power plants of Ennskraftwerke AG
supply local areas with drinking water and
therefore fulfil an important function for
society.
The increased consumption of river water
at the thermal power plants is attributable
to the fact that the brown coal-fired power
plant Voitsberg 3 was put in reserve. This
power plant has a cooling tower that uses
less water than a once-through cooling system.
The electricity that was fed into the

ENVIRONMENTAL INDICATORS
Unit 2004 2005 2006 Comment
Generation of electricity GWh 29,853 29,011 28,087 Net value, excl. auxiliary consumption
thereof water power GWh 24,962 24,788 23,853
thereof thermal power GWh 4,891 4,223 4,233
Generation of district heating GWhth 923 926 894 Voitsberg is in reserve since May
2006, the two biomass furnaces in
St. Andrä were decommissioned in
June 2006
Transported electricity volume in APG grid GWh 33,571 36,647 36,566
Grid losses GWh 461 521 478
Share of grid losses in total transported volume % 1.4 1.4 1.3
Fuel consumption at thermal power plants t 1,151,845 927,845 1,046,222 Hard coal
t 1,006,439 1,115,686 656,545 Lignite
t 113,926 99,012 98,029 Heavy oil
1,000 m3 15,707 21,301 21,436 Gas
t 14,138 3,005 21,309 Biomass and secondary fuels
(since 2005 only sewage sludge)
t 14,138 3,005 21,309 thereof biogenic share
t 0 0 0 thereof fossil share
Emissions avoided through utilization of hydropower1 t 11,766 11,729 11,301 SO2 t 12,606 12,567 12,109 NOX t 560 559 538 Dust
t 22,690,773 22,620,870 21,795,480 CO2 t 840 838 807 CO
Emissions of air pollutants at thermal power plants t 244 222 237 Dust
kt 4,437 3,810 3,701 CO2 fossil
t 2,582 2,289 2,110 NOX t 1,472 1,492 1,269 SO2 Hazardous waste t 1,424 1,085 833
Non-hazardous waste t 5,484 24,645 36,907
thereof from ongoing operations t 5,484 5,516 8,194
thereof from large-scale measures t 0 19,129 28,713 Demolition of Pernegg power plant,
Removal of river sediment
Residues from thermal power plants t 397,481 410,394 307,522 Bollom and fly ash,
Desulphurization product
Water, input and output 1,000 m3 483 453 454 Drinking water (taken from public
Hydropower plants and head offices conduit or own wells)
1,000 m3 14,644 15,251 14,603 Water for industrial use
1,000 m3 100 89 81 Waste water (connection to public
sewage or from cesspits)
Water, input and output at thermal power plants 1,000 m3 31 29 22 Drinking water
1,000 m3 575,363 473,137 509,656 River water (cooling water)
1,000 m3 178 266 271 Well water
Water, input and output at grid facilities 1,000 m3 10 12 9 Drinking water
1,000 m3 1 1 1 Water for industrial use
1,000 m3 11 13 10 Waste water
Environmental fees € 0 0 0
Total environmental costs € million 48.37 38.31 49.88
thereof environmental costs/hydropower € million 30.25 25.84 34.47
thereof environmental costs/thermal power € million 15.45 9.63 12.54 Excl. purchase of EU-allowances
thereof environmental costs/grid € million 2.67 2.84 2.87
Research costs € million 4.28 5.90 7.08
Investments included in research costs € million 0.41 0.90 1.85
1 Calculation on basis of a modern hard coal-fired power plant (Dürnrohr power plant)
57

58
LOCATION- AND PRODUCT-SPECIFIC CERTIFICATIONS IN VERBUND
grid from Voitsberg 3 had to be generated
in other thermal power plants thus leading
to higher water consumption.
Biodiversity
Effects on biodiversity (G3 indicator
EN14): details on numerous tests and
measures relating to terrestrial and aquatic
habitat can be found in the environmental
and research data that is published by Verbund
on an annual basis.
CERTIFICATIONS 2006
Impact on waters
(G3 indicator EN9)
Significant volumes of water are used but
not removed. The removal of river waters
at thermal power plants and residual water
volumes at hydropower plants is legally regulated
through decisions of the water
authorities. The parameters »affected water
routes« and »residual water routes« are
described in the environmental and research
data that is published by Verbund
on an annual basis.
Locations in nature reserves
(G3 indicator EN11)
Some of the power plant facilities of Verbund
border on Hohe Tauern National
Park or lie along the Danube in Natura-
2000 regions. These areas were, however,
only designated as natural reserves decades
after the construction of the power plants.
This serves as further proof of the environmentally
friendly manner in which Verbund
conducts its operations.
Certification Plant type No. of Certified Certified SC Guaranteed
plants BNC in MW in GWh/a generation in GWh/a
EMAS II Power plants 34 3,233 1 11,671
Grid facilities 1
ISO 14001 Power plants 65 3,688 1 13,687
Grid facilities 2
ISO 9001 Main control center 1
OHSAS 18001 Grid region 1
TÜV – 100 % hydropower Power plants 74 at least 16,000
TÜV – 100 % thermal power Power plants 3 815
Renewable Energy Certificates System (RECS) 2
ÖVE 34 475 2,106
1 Excluding Voitsberg power plant (in reserve since mid-2006)
2004 2005 2006
Share of locations with EMAS audit 23 % 23 % 28.7 %
Share of locations with ISO-14001 certificate 51 % 51 % 57.4 %
ISO 9001 Main control center
OHSAS 18001 1 grid group
Share of electricity generation Hydropower 100 % 100 % 100 % Excluding supplies to power plant participants,
from plants with product quality label (TÜV, ÖVE) pumped electricity and auxiliary consumption,
2006: 19,771 GWh
Thermal power 100 % 100 % 100 % Excluding supplies to power plant participants
(TÜV) and own consumption, 2006: 3,966 GWh

Waste
Since 2006, solid waste from wastewater
treatment facilities at power plants Mellach
and Werndorf is recorded as waste. The
demolition work at Pernegg power plant
has recently increased the volume of nonhazardous
waste. The 24,000 tons of waste
mainly comprises the foundations and
walling which were processed and used to
fill the foundation pits (see project description
on page 33). At Werndorf power plant,
approx. 2,200 tons of river sediment was
removed from the area in front of the cooling
water inlet.
Environmental costs
The increase in environmental costs at the
hydropower plants is attributable, above
all, to the completion of the StadtKraft-
Werk Leoben where an extensive leisure
and recreation area was created along with
a fish bypass. Fish bypasses were also constructed
at the power plants Melk, Laufnitzdorf
and Peggau. The third largest cost
factor is the dredging work to maintain the
navigation channel.
ENVIRONMENTAL
PROJECTS
Fish bypasses to ensure the continuity of
the water routes
Fish bypasses increase the continuity of the
waters in line with the requirements of the
Water Framework Directive. The bypass
channel at Peggau power plant in Styria,
which was built in 1908, is the oldest development
of this kind at Verbund.
Melk fish bypass
The construction work for the fish bypass
at the Danube power plant Melk is now
well advanced. The concrete work is practically
completed and the bypass stream has
been dug out and structured. Large areas of
the channel have already been sealed with
loam. Due to the fact that the waters of the
Danube are low in some periods, it was
possible to construct a banking up to the
»spur« downstream of the Luberegg ramp
and open part of the fish bypass in December.
The remaining measures should be
completed by the end of February at which
time the entire fish bypass will be available.
The ecological analysis program will commence
at the beginning of the huchen and
nase (both fish species particular to the
Danube) spawning season. The preliminary
work has already commenced.
Leoben fish bypass (Mur)
During the construction of the Leoben
power plant a state-of-the-art fish bypass
was created thus removing the migration
barrier that had existed since 1905. The bypass
was completed in spring 2006.
Dionysen fish bypass (Mur)
One special feature of this system is the
long, near-natural bypass stream. The bypass
has been operational since the fall of
2005.
Laufnitzdorf fish bypass (Mur)
This project was implemented within the
framework of a cooperation with ASFI-
NAG during the expansion of the highway.
The bypass was completed in spring 2006.
Peggau fish bypass (Mur)
This measure required work on an existing
low weir at Peggau power plant and the
utilization of the existing fish bypass at the
weir to ensure the continuity of the overall
system. The construction work started in
October and was completed in December
2006.
Laufnitzdorf fish ladder
Systems in the project phase
(planned for completion in 2007)
Spielfeld fish bypass (Mur): This project is
being implemented within the framework
of the INTEREG project »Measures for the
Lower Mur Valley«. One interesting aspect
of the project is the fact that not only the
reservoir of Spielfeld power plant but also
the Gamlitzbach river will become tributaries
to this rejuvenated section of the
Mur river. Work should be completed in
2007.
Villach fish bypass (Drau): This is a cooperation
project with an industrial partner
in which innovative technologies will
be tested with the support of the universities
of Weimar and Kassel. On completion
in spring 2007, these innovations will be
evaluated within the framework of a
monitoring program that will be carried
out by the University for Agriculture and
Forestry and the provincial government of
Carinthia.
Contact:
Dipl.-Ing. DWT Otto Simon, MBA
Tel. +43 - (0)503 13 - 54 414
E-mail: otto.simon@verbund.at
Dipl.-Ing. Josef Dussmann
Tel. +43 - (0)503 13 - 54 417
E-mail: josef.dussmann@verbund.at
59

60
RESEARCH
We conduct research to further develop the
technical plant and machinery, products
and processes that are used in the company
in a systematic way and on the basis of
scientific methods with a view to further
enhancing corporate success.
The research results are published via different
channels, e.g. within the framework
of the publication series »Research at Verbund«,
in the Verbund research forums or
on the Verbund website (www.verbund.at)
under >company>responsibility>environment
and research>research.
Key research activities 2006
In 2006, a total of 69 application-oriented
research projects – some in cooperation
with partners – were processed, of which
25 were completed. The research projects
have an overall project volume of € 27.6
million over the full term of the projects,
with € 24.8 million of this amount coming
directly from Verbund. In fiscal 2006, Verbund
invested € 7.1 million in research.
Verbund is keen to enhance its research activities
and has also been successfully taking
part in European research projects for
many years. As a result of this participation,
Verbund is able to participate in the
results in spite of having relatively low own
resources.
In 2006, Verbund participated in three European
projects with a total project volume
of € 10.4 million.
Selected research projects
Due to the massive pressure to increase
power plant capacities, the central focus of
the research activities again rests on current
construction projects. A number of these
are described in the following. Details relating
to all of the current Verbund research
projects can be found in the »Environment
and Research Data 2006«.
Research in the generation area
The projects in the area of hydropower generation
should, on the one hand, guarantee
safe operations while maintaining a
high level of environmental protection
and, on the other hand, bring technical improvements
so as to optimize the yield.
Newly developed turbine blades for runof-river
plants are currently being installed
at the Danube power plant Aschach. The
optimized design will lead to an increase in
output and standard capacity. Fish ladders
are being created at several existing run-ofriver
power plants e.g. on the Danube,
Drau and Mur.
The new fish bypass at the Danube power
plant Melk was constructed within the
PROJECT VOLUME OF RESEARCH ACTIVITIES € million
2004 2005 2006
Completed projects 31 24 25
Ongoing projects 32 39 44
Total project volume 43.5 53.8 27.6
thereof project volume of EU projects 38.3 38.1 10.4
Verbund’s share 16.3 26.4 24.9
Verbund’s actual expenses per year 4.3 5.9 7.1
framework of the EU-subsidized LIFE project.
Although fish ladders have been well
analyzed in the past, the fish bypass still requires
a lot of research. The ecological improvement
in this Natura-2000 region at
the Lower Ybbs is also being recorded on
film to examine the functionality of the
fish bypass.
In the storage power plant area, the development
work for the construction of the
pumped storage power plant Limberg II
commenced. This plant will double the capacity
of the existing Kaprun power plant
group (see project description on page 27).
A pumped storage power plant needs two
reservoirs. In the case of Limberg II, these
are the Mooserboden and Wasserfallboden
reservoirs with a height difference of 360 m.
The reservoirs are connected to the power
plant via a 4.2 km long pressure tunnel and
a 600 m pressure shaft. During turbine
operation, 72 m 3 /s flow into the lower reservoir
and in full pump operation water is
pumped up at 51 m 3 /s. Within the framework
of the construction project, a research
project that focused on the design of
surge tanks was conducted in cooperation
with the Technical University of Graz.
The further development of the tanks was
necessary due to the higher demands that
are placed on the dynamic behavior of the
pumped storage power plants through the
strong fluctuations in wind energy. The research
project examined how the speed at
which a three-chamber surge controls the
flow of water to the turbine could be further
enhanced and how unnecessary losses
and mechanical stress could be reduced. In
this way, hydropower generation could be
adjusted to the fluctuating output of wind
power generation in a more optimal manner.
In the thermal generation area, research is
being conducted into the development and
reduction of greenhouse gas emissions and
the effect of an increased district heating
supply on the reduction of fine dust. In addition,
special oscillation analyses are being
carried out on power plant components.
The National Allocation Plan, the Emission
Certificate Act and the corresponding di-

ective on operational implementation are
of particular interest. The effects of the
new legal requirements on the operation of
existing plants and planned power plant
projects are being examined within the
framework of a research project that is
being carried out by ATP. A complete
power plant was demolished for the first time
at the location of the thermal power plant
Pernegg. The research during the demolition
phase (see project description on page
33) focused on achieving a high reutilization
level for the power plant material as
well as on recultivating the location.
Research in the grid area
The construction of transmission lines is
based on long-term planning horizons
whereby the features of the system are fixed
for a number of decades. The high-voltage
lines that are being used today were constructed
approx. 50 years ago and no longer
meet the market requirements: on the
one hand, the load flows have shifted as a
result of deregulation and, on the other
hand, energy consumption is increasing year
for year. Added to this are the growing
capacities from new renewable energy
carriers, the integration of which is limited.
Verbund is therefore involved in the
research committees that focus on
decentralized generation (see also
www.energiesystemederzukunft.at).
In addition to the purely technical research
projects, the influence of the various regu-
CONSTRUCTION OF A THREE-CHAMBER SURGE TANK
Pressure
shaft
Shaft depth
Saved
shaft depth
Pump and
turbine shaft
Pump chamber
Upper chamber
Height of counterpressure
for the pumps
Riser shaft
Lower chambers integrated
into the UW tunnel
lating systems, i.e. the influence of economic,
legal and ecological conditions on grid
operations, is being examined in the research
project »Regulatory Economics« at
the University of Economics and Business
Administration in Vienna. In addition to
the ecologically oriented research projects
that focus on sustainable line management,
reference should also be made here to an
EU-sponsored LIFE-Nature project that is
dedicated to providing cross-border protection
of the great bustard.
Research in the investment area
In this area, we examine the impact new renewable
energies and decentralized generation
could have on energy generation in
the future. The utilization of the wind
power in the neighboring countries to the
east does, for example, have interesting development
potential: the wind volumes
and the grid integration possibilities call
for alternative grid integration criteria to
that in Austria. The research aims to find
possible solutions for the implementation
of a wind park project in Hungary. Definite
consideration is also being given to the
utilization of photovoltaics.
Publication of research results
The results of the Verbund research projects
are published in the publication series
»Research at Verbund«. The individual volumes
are available as PDF files and can be
downloaded under www.verbund.at. Printed
copies of some issues are also available.
Height necessary
for water
acceleration
Tunnel chamber
UW tunnel
UW tunnel
Lower basin
Maximum storage level
The Verbund research forums, which have
been taking place three to four times a year
for the last 15 years, are now well-known
events within the energy industry. They
provide scientists, the media and the general
public with an opportunity to gain information
on current, energy-related issues
and discuss the results of the individual research
projects. With between 150 and 200
experts in attendance, they are among the
best visited events organized by the group.
The first research forum 2006 of VER-
BUND-Austrian Power Grid GmbH (APG)
was entitled »Growth needs infrastructure
– infrastructure projects in the light of subsidiarity«.
Here, questions relating to regional
planning for infrastructure projects, the
future of trans-European grids and the
corresponding approval procedures were
discussed.
The second research forum, which was also
organized by APG, was entitled »Renewable
Energies – A Challenge for the Electri-
SURGE TANKS INSIDE THE MOUNTAIN
The kinetic energy of the flowing water
in the long tunnels to the turbines is
enormous and could – if the inflow was
stopped suddenly before it reached
the turbine – destroy the entire tunnel
system. On the other hand, the water
has to be accelerated quickly to ensure
that the pump does not have to run
without load when it is switched on.
»Surge tanks« allow hydraulic separation
between the head race gallerie and the
turbine and guide the accelerated water
into a system of chambers and restrictor
elements which effectively dampen mass
oscillations in the pressure tunnels and
swings of pressure in the pressure shaft.
The three-chamber surge tank is unique
in that the water column can be split and
subsequently reunited. Consequently,
the mode of operation can be quickly
changed from turbine to pump operation
and vice versa.
61

62
city Grids in Europe«. The forum focused
on the special situation of the Austrian
transmission grid and discussed the challenges
arising from the integration of wind
energy.
The third research forum 2006 was
dedicated to capacity bottlenecks in electricity
generation and transmission. The
VERENA Prize 2005 was awarded within
the framework of this forum. The pumped
storage power plant Limberg II was used as
an example to show the requirements that
are placed on the dynamics of surge tanks,
and innovative strategies were put forward
for the transmission grid area.
VERENA Award
On 16 November, the excellent work of
young scientists in the areas of hydropower
and the new renewable energies was honored
within the framework of the third research
forum. The three VERENA prizes
went to:
Dipl.-Ing. Christoph Leitinger for his thesis:
»Utilization and Effects of Phase-Shifting
Transformers in the Transmission
Grid« which took first prize. This thesis
presents technical possibilities for congestion
management in the form of load-flow
control elements and describes the manner
in which they function.
The second prize went to cand. Ing. Irene
Bischof, who examined the »Legal and
The winners of the VERENA Prize 2005
(f.l.t.r. General Director Dipl.-Ing. Hans Haider,
Dipl.-Ing. Christoph Leitinger, cand. Ing. Irene Bischof,
Dipl.-Ing. Thomas Siebenhüner, Dr. Herbert Schröfelbauer,
Chairman of the Managing Board of AHP)
Economic Effects of emptying Reservoir
Areas« at the Technical University of Graz.
Dipl.-Ing. Thomas Siebenhüner from the
Technical University of Vienna was awarded
the third prize for his thesis »Demand
Side Management of Small Consumers«.
This thesis analyzed the possibilities for demand
side management in private households,
i.e. how load peaks can be reduced
by switching appliances on and off as required.
EURELECTRIC Conference
The EURELECTRIC-VEÖ Conference on
»Renewable Energy in Central & Eastern
Europe: Challenges and Policy Responses«,
an event that was initiated by Verbund,
took place on 15 and 16 November 2006
in Palais Ferstl, Vienna. In addition to experts
from the Austrian electricity industry,
representatives from the East and Southeast
European countries accounted for
one-third of the 120 participants.
The central points of the discussion: The
share of renewable energy carriers in electricity
generation currently lies at 18 to
19 % in the EU and should be increased to
21 % by 2010. To achieve this goal, the European
Commission will focus more
strongly on integrative approaches that include
all energy forms and will also offer
additional incentives.
Increasing energy efficiency, purchase
guarantees, subsidies for emission reductions
and the height of the subsidy are all
essential elements in this respect. In the
first step, higher subsidies will be made
available. The expansion of the transmission
grid and innovative approaches for
saving energy are essential to promote renewable
energy sources.
There is also significant potential for hydropower
in the EU and worldwide. The
transport routes for biomass should be reduced
to the greatest extent possible as the
final product, electricity, is easier to transport
than solid fuel (details available under
www.eurelectric.org >Past EURELECTRIC
Events).
Contact:
Dipl.-Ing. Dr. Gerd Schauer
Tel. +43 - (0)503 13 - 54 415
E-mail: gerd.schauer@verbund.at

64
SOCIAL INDICATORS
Verbund is committed
to the objective of
sustainable corporate
management. For this
reason, it is essential
that we cooperate with
our employees on a fair
basis, offer them support
and development opportunities,
attend to their
security and remunerate
them in line with
market conditions.
Peak performance of all employees and internationalization
throughout the personnel
management area are central pillars for
guaranteeing successful and healthy growth
within Verbund. Performance is an important
aspect for us, but we also want to lay
high emphasis on the concept of equal opportunities.
All Verbund employees – irrespective
of their working hour model – are
entitled to social benefits that include a
pension fund and supplementary health
insurance. 216 disabled employees are integrated
into the work process in accordance
with § 5 of the Disabled Persons Employment
Act. Hence, the legal requirement is
exceeded by 110 employees.
In line with our mission statement, we
strictly condemn any violation of human
rights. This is also reflected in the purchas-
ing conditions we impose on our subcontractors
to ensure that ethical standards are
adhered to. Verbund’s strict intolerance of
»corruption and bribery« is now even
more clearly expressed through the revised
wording of the corresponding passage in
our mission statement. A new guideline
will be worked out in cooperation with experts
in the coming year.
DEVELOPMENT WITHIN VERBUND
Sustainable growth requires highly qualified
employees at all levels. For this reason,
the training campaign was continued. This
consequent approach is also reflected in
the personnel development figures. An
average of one week of training per year for
each employee has been implemented at
Verbund many years ago. Verbund aims to
provide all employees with greater access to
training measures (86 %). Cost efficiency
and high quality requirements are essential
conditions for all of the measures that are
implemented. Extensive controlling measures
are in place to ensure that these
aspects are monitored on a regular basis
and adjusted to be in line with the goals.
Talent management
The Talent Management Program, which
was established in 2005, was successfully
implemented.
The professional and social competence of
the high performers represents an essential
quality aspect. For this reason, approx. 260
high performers were intensively monitored
by the executives on the basis of an employee
portfolio. Of these, approx. 50 can-
didates were subsequently analyzed in an
executive panel on the basis of leadership
and further specialized criteria. This was
followed by an appraisal at first management
level and an external audit. These
steps allowed us to shape the future development
of high performers and promote
them according to their strengths.
About 10 % of the employees were allocated
to various target groups where standardized
and graded training programs
were carried out. Here, the executives were
responsible for the development of their
respective employees. A number of measures
that focus on the creation of networks
within the group were implemented with a
view to promoting cross-company thinking
and intensify expertise.
Executive development
The group executives are a primary target
group within the framework of the strategic
training campaign. Verbund has set
three important goals for its executives:
o Enhanced management competence
to guarantee corporate success,
o maximum acceptance of the challenges
posed by leadership tasks, and
o training of modern management,
communication and presentation skills.
For this purpose, two central activities were
initiated for the executives: the Elective
Module Program for executives with a wide
range of options and the Management Culture
Process which is developed top down
by the management board and the first
management level. This process focuses on
performance management. All measures

SOCIAL INDICATORS
Indicator Unit 2004 2005 2006 Comment
No. of employees Persons 2,504 2,479 2,466 No. of employees under labor laws as of 31.12.
excluding managing boards and employees in early retirement
(average No. of employees in Annual Report 2006: 2,438
employees)
thereof apprentices Persons 83 96 98 Training beyond own requirement level
New hirings Persons 41 75 89 New hirings in accordance with the operational requirements
thereof new apprentices Persons 25 25 24 Constant development
Share of women in new hirings % 15.4 36.0 34.8 Personnel marketing measures continue to show effect
Resignations Persons 146 111 123 All resignations, early retirement and deaths at work
Share of women % 14.7 15.1 15.7 Activities to promote women will be continued
Share of academics % 12.0 13.1 14.0 Increased hiring of academic staff
Trained employees % 86.0 89.9 85.6 Maintain high level
Training per employee Hours 36.8 44.0 40.0 Concentration on strategically important measures,
1 training week per employee
Training per executive Hours 60.8 110.4 96.0 Establishment of a special Management
Development Program from 2005
No. of seminars attended/employee Seminars 2.9 2.8 3.2 Broader qualification
Direct education expenditure/employee € 839 1,068 1,220 Increase due to specific measures
Average costs per training day € 180.6 194.0 247.5 Increase due to rise in measures for small groups and
external venues
Notifiable 1 accidents Number 57 49 38
Total no. of sick days resulting from
notifiable accidents
Days 1,182 1,056 808
2
Accident rate (no. of notifiable
accidents per 1000 employees)
22.8 19.8 15.4
2
Accident severity (no. of sick days per
notifiable accident)
20.7 21.6 21.3
2
Fluctuation rate % 1.32 0.78 0.81 Attractiveness of employer
Average age of employees Years 44.1 44.6 44.6 No further increase in average age
No. of years at company Years 20.0 20.5 20.6 Long-term loyalty
Employee interview quota % 99.1 99.7 98.1 Practically all employees now included
1 Adjustment of the computing method 2006: in accordance with AUVA, the day of the accident is not counted as a sick day.
This leads to a reduction in the number of notifiable work-related accidents.
2 Adjustment of the computing method 2006: in accordance with AUVA, the day of the accident is not counted as a sick day.
had extremely high participation levels.
Practically all of the executives participated
in a seminar, workshop or individual
coaching that aimed at enhancing their
leadership performance. A total of 18
events involving 347 person days were car-
ried out. Nearly all executives attended the
special event »Performance differentiation
from a labor law perspective« with
o. Univ.-Prof. Dr. Wolfgang Mazal from the
Institute for Labor and Social Security Law
at the University of Vienna.
The closing event in this year’s series of
events also proved to be the highlight,
namely, the lecture delivered by the bestseller
author Ralph Krueger in front of 50
Verbund executives on the theme »Leading
Teams to Peak Performance«. The clear
65

66
message of the success trainer: »Strong
leadership involves serving others. Hence,
every executive must become a ‘team playing
leader’«.
Enhanced qualification
An extensive training program is implemented
at Verbund to enhance the qualifications
of all employees. To achieve the required
growth, the central focus of the program
lay on group-wide issues that included
an English language campaign and development
opportunities for foremen as
well as company-related projects and forward-looking
target group programs.
English language campaign
The English language campaign was introduced
in the first half of the year with a
view to promoting internationalization. In
addition to the 130 employees who are already
attending English courses, a further
183 employees registered within the framework
of this campaign.
The weekly intensive courses, which are offered
at different levels, commenced in the
fall of 2006. These were supplemented by
»Theme Days« where a special theme is
dealt with in English language on one particular
day. In addition, every day employees
have the possibility of discussing issues
with a native speaker at the »Meet & Eat
table« in the new canteen.
FOCUS OF THE TRAINING MEASURES IN 2006
Securing grid operations
Following the completion of the major
project »Training and further education for
grid operators at APG«, VERBUND-Austrian
Power Grid AG (APG) has now presented
an international benchmark for a
comprehensive training and further education
concept.
Based on the UCTE requirement that management
personnel has to be provided
with training, APG has now developed a
totally new and comprehensive conceptual
basis for the training and further education
of its employees. This is essential to guarantee
the quality of grid operations and
security of supply in Austria. The 16 training
modules, for which detailed and professional
training materials have been developed,
are optimally supplemented by
external simulator trainings.
Central Control Station Danube
In 2007, VERBUND-Austrian Hydro
Power AG (AHP) will introduce centralized
management of the nine run-of-river
power plants on the Danube following the
integration of new control technology
components. Consequently, the employees
at the control stations required additional
training which was provided through the
implementation of several training measures.
A new modular program which is
highly practice oriented has been developed
and implemented.
Safety 22.65 %
Technical 15.82 %
Languages 10.33 %
SAP/PC user training 9.72 %
Organization and team development 9.48 %
Other 31.99 %
The training program extended from in-situ
training at the power plant locations
and participation in commissioning processes
to team-forming workshops. Systematic
assessment by those responsible for
the training and continuous feedback from
the trainees also formed core elements of
the program. All employees passed the final
examination before the committee with
distinction.
Secretaries are office managers
Secretarial duties have changed greatly over
the last few years. They have become much
more dynamic and require a great deal of
flexibility. Many traditional tasks are no
longer necessary due to the technological
advances of the last years and new tasks
have been created. The special development
program for this employee group
builds on the active confrontation with the
new job profile and offers targeted training
measures.
This process was initiated at AHP in 2005
and successfully continued in 2006. Twenty-six
office managers at AHP attended a
workshop in Kaprun entitled »Assistance
in changing times«. The significance of this
process was also underlined by the fact that
the results of the workshop could be discussed
with the Chairman of the Managing
Board of AHP.
Professional crisis management
Professional crisis management is gaining
in importance, theoretical training is no
longer sufficient. Crisis scenarios and practice-oriented
workshops were therefore
carried out to supplement the clearly structured
crisis management program. AHP
carried out a real-life exercise on the Danube
in the Melk reservoir area. This took
place under the leadership of Melk district
administration together with the blue-light
organizations and the military commando
unit of Lower Austria. The training exercise
was carried out over a period of four days.
The scenario focused on a break on the
220 kV and 380 kV high-voltage lines in
Upper Austria between St. Peter und Ernst-

hofen as a result of flooding (see project
description on page 40). Within the framework
of its crisis management program,
VERBUND-Austrian Thermal Power
GmbH & Co KG (ATP) engaged in an exercise
which assumed that an oil tanker was
in flames following a terrorist attack.
Continued restructuring
in the thermal area
The restructuring process, which was initiated
at ATP in 2004, will be completed in
2008. Fiscal 2006 was marked by the final
decommissioning of the thermal power
plant Voitsberg. Operations ceased on 20
June and the plant is now on reserve standby.
After consultation with the staff representatives,
the 100 employees at the plant
were given new positions or a socially compatible
solution was found in accordance
with the social plan. All of these measures
were and are still being accompanied by an
intensive training and further education
program.
The ENERGY FOUNDATION, which was
founded within the framework of the social
plan modules, guarantees that employees,
and in particular older employees, will receive
vocational training for a period of up
to four years. Through the offer of reemployment
in the group, the employees are
highly motivated to successfully complete
the vocational training. The Personnel Manager
of the group and the Central Works
Council function as foundation councils
for the duration of the initiative. The initiative
is promoted and supported by the
province of Styria, the »social-partnership«
and the Austrian Labor Market Service.
Group-wide introduction
of performance-based salary model
All employee contracts correspond with
the collective agreements. In addition, performance
that is particularly important for
the development of the group is rewarded
in a result-oriented manner. For this reason,
the performance-oriented salary model
with fixed and variable components was
introduced at a number of companies sev-
eral years ago. Men and women in the same
position are, of course, remunerated equally.
The performance-oriented salary model
is now gradually being implemented
throughout the entire group. All new employees
are automatically integrated into
the system and receive variable salaries in
accordance with their performance. The
annual employee interviews, during which
development potential is assessed and individual
training requirements are worked
out, are used as a basis.
INTERNATIONALIZATION
OF VERBUND
Due to the growth barriers in the domestic
market, Verbund has been expanding its
foreign activities for a number of years. For
this reason, it was necessary to recruit employees
from all over Europe.
International APT
Today, VERBUND-Austrian Power Trading
AG (APT) has employees from 10 different
nations – Austria, Germany, France, Slovenia,
Poland, Italy, Hungary, Slovakia, Britain
and America – who all work together in
one company. The intranet page of APT
also reflects the international focus: the articles
of association and the rules of procedure
are shown in two languages as is the
Rule Book of APT, which defines the rules
for electricity trading. English has already
become a second working language at APT:
on the trading floor, in the IT area as well
as in day-to-day small talk.
Young Professional Program
With the central focus on internationalization
and growth, the Verbund trainee program
was relaunched under the new name
»Young Professional Program«. Eleven
young professionals from six nations –
highly motivated university graduates with
up to three years experience – are participating
in this training program. Over the
18-month training period, each of the
young professionals will work in a division
of the holding, at a subsidiary and will also
be involved in international projects. Each
participant is supported by a mentor from
the first management level who, among other
things, will be responsible for his training
and further education. In addition to
a broad training package with basic seminars,
each of the young professionals receives
an individual training program.
Apprenticeships
The apprenticeships offered at the AHP
training center are very successful in providing
specialist workers for the future. The
best results ever were achieved at the final
examination 2006: twenty-four apprentices
from Verbund took the examination for
the dual training course in electrical/
mechanical engineering. All passed – onethird
passed »with distinction« and a
further third »with merit«.
A great deal of commitment is necessary to
achieve these results. Targeted information
which is forwarded to schools, motivates
school leavers to apply for an apprenticeship.
The best applicants are chosen within
the framework of a structured selection
process. A technically and pedagogically
trained team supports the apprentices who
will learn on state-of-the-art machines. In
addition to the vocational training, the apprentices
are also offered accommodation
and an interesting recreation program.
HEALTH CARE AND SAFETY
The safety of the employees is an important
issue at Verbund. Employees that engage
in operational, maintenance and repair
activities are always confronted with
dangers. Work at the run-of-river and storage
power plants, the thermal power plants
and on the high-voltage lines not only requires
technical expertise and many years
of experience but also a special safety management
process. This safety management
process focuses on protecting employees
and electrical installations from sources of
danger. The central steps involve:
o Pointing out existing sources of danger,
o Evaluating potential hazards, and
o Selecting suitable protection measures.
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68
NUMBER OF EMPLOYEES – SICK DAYS
No. of employees
under labor law
Total number of sick days
from notifiable accidents
Numerous protection measures and regulations
have been imposed by the legislator
to protect against clearly definable dangers.
Dangers that are not apparent at the first
glance are, however, much more difficult to
evaluate. They only occur in the presence
of unfavorable conditions or process failures.
For this reason, an extensive planning
phase is vital to guarantee an accident-free
working environment. An exact analysis of
all work steps is essential to identify all
sources of danger and create efficient protection
measures.
The prevention of falling accidents is one
of the most important employee protection
tasks within the group. Consequently,
further technical and organizational measures
were taken to reduce this hazard.
Partly as a result of these measures, there
were no falls in the last years. Fortunately,
there were also no electricity-related accidents.
Numerous training measures with
ACCIDENTS – ACCIDENT RATE – ACCIDENT SEVERITY
Number of
notifiable accidents
Accident severity =
sick days per accident
Accident rate =
accidents per 1,000 employees
15.4
808
the following focal points were carried out
in the employee protection and safety area:
o Working with hazardous (chemical)
substances,
o Coordination of construction and
maintenance measures,
o Testing of low-voltage electrical installations
and equipment,
o Working at elevated locations, and
o Fire, explosion and noise protection.
Occurrence of accidents in the group
Although the number of employees in the
year under review only dropped slightly
compared to the previous year, there was a
large reduction in the number of notifiable
accidents and corresponding sick days.
This development confirms that we have
adopted the right approach in the area of
accident prevention. Injuries of the extremities
accounted for approx. 76 % of the
20.9
23
21.3
24
21.4
1,255
1,221
38
2004
2004
2005
2005
49
2,504
2,479
2,466
2006
57
2006
sick days. 95 % of the accidents were caused
by carelessness on the part of the injured
party, an oversight or force majeure
and only 5 % had an organizational cause
or took place as a result of regulations
being inadequate or not observed.
WOMEN IN VERBUND
Daughters’ Day
This year, Verbund participated in the Vienna
Daughters’ Day for the third time and
gave 26 girls aged between 11 and 16 an insight
in some technical vocations. At VER-
BUND-Austrian Power Grid AG (APG) the
young girls visited their parents at their
workplace and received information on the
various technical careers. At substation
Southeast a number of the girls were even
brave enough to climb up a pylon.
Female apprentices
Four young girls are currently participating
in the dual apprenticeship electrical/mechanical
engineering at Verbund. Two
started in 2005 and are now engaged in
practical training at the power plants since
November 2006. The other two girls commenced
with their basic training in the
training center in 2006. All four girls show
a great interest for technology and are very
enthusiastic about their apprenticeship.
Their good performance to date indicates
that they have selected the right vocation.
Statements made by the girls:
»My dad and my brother are fitters. In
watching them work, I was fascinated by
the manner in which hard materials can be
processed. I have seen a lot of interesting
circuit diagrams and noticed that most
people are afraid of electricity – they are
afraid of what happens. Knowing how the
process works is really cool!«
»I have wanted to do something with engineering
ever since I was a child.«

Brave girls at the Daughters’ Day event.
Women in management
Six female managers at Verbund tested methods
of generating new ideas and enhancing
creativity within the framework of a
project entitled »Different Thinking«.
The creative potential was also used to
work out concrete ideas on the issue of
»Women at Verbund«. The benefits for the
company are obvious: teams that are made
up of men and women come up with better,
holistic solutions.
ACCIDENTS PER CATEGORY
Number of serious accidents
(more than 45 sick days)
Number of medium-sized accidents
(20 to 45 sick days)
Number of small accidents
(4 to 19 sick days)
Number of minor accidents
(0 to 3 sick days)
2
4
6
One prerequisite here is the conscious acceptance
of diverging viewpoints in a decision-making
process. One measure has already
been decided upon: each team in
Verbund should have at least one female
member.
Recruiting
The aim of having at least one woman in
every team requires that more females be
recruited. For this reason, the recruiting
11
16
17
23
26
27
2004
30
2005
34
35
2006
personnel explicitly call on women to apply
for a position at Verbund.
ART SPONSORING
Since 2002, the Museum for Applied Arts
(MAK) in Vienna can be visited free of
charge by the public on Saturdays. MAK is
one of the few museums that offer the
opportunity of experiencing modern art to
people who cannot afford to pay the entrance
fee of € 8.00. And with great success:
visitor numbers have rocketed on this
day.
Offering free admission on Saturdays
would, however, have created a serious financial
problem for the museum in the
long term. Since 2006, Verbund has been
supplying the museum with free electricity
equivalent to the amount of admission fees
that would normally be taken in on the Saturdays.
As a result, this socially significant
project can be continued. In May 2007, the
cooperation between MAK and Verbund
took on a new dimension: works from the
VERBUND COLLECTION will be exhibited
at the museum for a period of three
months.
Contact:
Dr. Rudolf Thurner
Tel. +43 - (0)503 13 - 54 100
E-mail: rudolf.thurner@verbund.at
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70
MANAGEMENT APPROACH
In this chapter we
will present the
organizational and
operational structures
of Verbund and
provide an overview
of the central
management systems.
The group’s Managing Board is responsible
for the development of the corporate strategy
and defines the corporate goals in cooperation
with the Strategy Team, the managing
boards / managers of the subsidiaries
and the leaders in the key areas of the company.
Verbund’s strategy focuses on the following
main pursuits:
o We concentrate on our core competencies,
namely electricity production,
electricity trading and distribution and
electricity transmission.
o Our primary objective is to achieve
value-generating growth through the
adoption of a selective investment
policy in Europe.
o This growth objective is supplemented
by consequent cost management and
the optimization of the capital structure.
o Targeted selection, optimal deployment
and ongoing training ensure that our
employees always deliver peak performance.
o We base our actions on sustainable
corporate management and always
consider the expectations of our stakeholders.
Further goals include:
o The generation of environmentally
friendly hydropower supplemented by
flexible thermal generation with the
aim of achieving cost leadership
o Concentration on risk-optimized assetbased
trading (OTC, stock exchanges,
resellers and other large customers)
o Involvement in end customer business,
both directly and through the acquisition
of interests in regional electricity
distribution companies
o The efficient operation of the Austrian
high and extra-high voltage grid in our
role as Transmission System Operator
(TSO)
o Consolidation of the strong market
position in Austria and value-generating
growth in Central and Southeast Europe
o Reduction of capital costs
o Development and establishment of
qualified human resources in line with
the growth strategy
o Clear orientation towards sustainable
corporate management, at all times
taking due account of the stakeholders’
interests
CORPORATE GOVERNANCE
The Austrian Corporate Governance Code
The »Austrian Corporate Governance
Code« (www.corporate-governance.at) was
published in September 2002. In accordance
with defined international goals, the
code aims to boost the confidence of the
investors, customers and the public in corporations
and groups, active in the capital
market. The Code provides a guideline for
corporate governance for companies and
groups; it is based on responsible, sustainable
and long-term value creation.
This, on the one hand, should achieve
more transparency on the capital market,
and, on the other hand, improve the quality
of the working relationship between the
Managing Board, the Supervisory Board
CORPORATE GOVERNANCE
Regarding the latest external evaluation
of compliance with the Corporate
Governance Code, the Managing Board
declares:
»The Austrian Corporate Governance Code
was applied and adhered to at ÖsterreichischeElektrizitätswirtschafts-Aktiengesellschaft
in fiscal 2006 in accordance
with the explanations also provided on
the Verbund homepage.«
Any slight departure from certain rules
results, in part, from legal provisions
which were adopted specially for Verbund,
or is merely of a formal nature. Compliance
with the code will continue in fiscal
2007 and all rules which are currently
being handled differently will, to the
greatest extent possible, be implemented.
For Verbund, the application of the
Austrian Corporate Governance Code has
always been of immense importance and
it can be seen as a critical building block
that serves to enhance the confidence
shareholders, business partners, employees
and the public have in our company.
Further information on the Corporate
Governance Code in Verbund can be
found under http://www.verbund.at
>Company>Investors>Corporate
Governance.

and the General Meeting. Listed stock
companies, particularly in Austria, are called
on to commit to this code by way of
public declaration. Compliance with the
code’s rules is to be audited by an external
institution regularly and voluntarily, with
the results being published in a report.
The Corporate Governance Code
and its application at Verbund
Österreichische Elektrizitätswirtschafts-AG
(Verbund) is a stock corporation under
Austrian law. The Verbund share is listed
on the Vienna Stock Exchange, in Frankfurt,
in London and, through American
Depositary Receipts (ADRs), also in the
USA. The group’s operations are based on
policies that strictly comply with all of the
relevant legal provisions.
The application of the Austrian Corporate
Governance Code within Verbund was advocated
by the Supervisory Board and the
Managing Board just shortly after the code
was published. As a result, the Managing
Board voluntarily issued a public declaration
stating that the code would be binding
for Verbund from fiscal 2003. The majority
of the guidelines laid down in the code,
which are »par for the course« for good
and responsible corporate governance,
have been observed within Verbund for
quite some time already.
Since undertaking the commitment to
comply with the code, an external institution
is voluntarily commissioned each year
to independently monitor adherence to the
rules stipulated herein. The findings of the
audit are published in the Annual Report
as well as on the Verbund homepage.
AUSTRIAN CORPORATION ACT
The Austrian Corporation Act, which
establishes a very strict framework for corporate
actions and also contains corresponding
regulations for the board members
of the stock corporations pertaining to
liability and their obligation to exercise due
care, forms – along with all the other legal
regulations that normally apply for stock
companies – the basis for Verbund’s management
system.
Managing Board
The Managing Board is obliged to run the
corporation according to »the needs of the
company and the public good, taking into
account the interests of shareholders and
employees«.
The Managing Board is nominated in compliance
with the law governing the filling of
positions (Stellenbesetzungsgesetz BGBl. I
26/1998) and the regulation on specimen
contracts (Vertragsschablonenverordnung
BGBl. II 254/1998). These standards are
implemented by the Nomination Committee
of the Supervisory Board. The Managing
Board is responsible for all operational
activities, for the organizational and operational
structures and the corporate strategy,
which is formulated in consultation
with the Supervisory Board plenum.
Supervisory Board
The Supervisory Board is elected by the
General Meeting. It supports and monitors
the management activities of the Managing
Board. The members of the Supervisory
Board are nominated in line with the recommendations
of the Austrian Corporate
Governance Code (in particular, points 44
and 52).
Pursuant to the stipulations in the Labour
Constitutional Act (ArbVG, BGBI.
22/1974, in its applicable version), one staff
representative must be nominated for
every two supervisory board members
(shareholders) elected by the general meeting.
Under Austrian law, the supervisory
board members that are nominated may
Holding Österreichische Elektrizitätswirtschafts-Aktiengesellschaft
not at the same time be a member of the
Managing Board or an employee of the respective
company. The Supervisory Board
does not have any operational duties. It is
informed regularly on relevant matters relating
to business development, strategy
and risk management.
The Supervisory Board forms the following
committees: Working Committee (prepares
all meetings), Nomination Committee
(responsible for matters relating to the
nomination of the Managing Board),
Compensation Committee (issues relating
to the remuneration of the Managing
Board, pension plans, goals agreement,
contracts of members of the Managing
Board) and the Audit Committee (annual
financial statements).
General Meeting
The General Meeting is the supreme body
of the company. All shareholders can exercise
their rights at this meeting.
This extends to the decision relating to the
utilization of profits, the election of the Supervisory
Board, the appointment of the
independent auditors and the discharge of
the Managing Board and the Supervisory
Board.
Regardless of the amount of his investment,
each shareholder in the general
meeting has a right to speak and to ask
questions. He also has a right of motion
and a voting right. The General Meeting
cannot issue instructions to the Managing
Board or Supervisory Board.
71

72
Internal rules of procedure
Separate internal rules of procedure are defined
for the Managing Board and the Supervisory
Board. These rules of procedure
regulate details relating to the respective
activities of the boards and define limits
pertaining to discretionary powers. The
Managing Board and the Supervisory
Board of an Austrian stock corporation
company underlie the same strict obligation
to exercise due care (conscientious
execution of duties, high level of confidentiality).
The stock corporation is entitled to
claim compensation in the event of an infringement
of these obligations.
Protection for minorities
under the Corporation Act
Under the Austrian Corporation Act, small
and minority shareholders are also granted
special protection. If, together, they hold a
5 % interest in the company, they can, for
example, demand that a general meeting be
convened.
LABOR/MANAGEMENT RELATIONS
In Austria, the system of »social partnership«
is based on a cooperation between
employers and employees that has grown
over a long period of time. Under this system,
representatives of employers and employees
cooperate in the preparation and
implementation of economic and sociopolitical
measures. In all this, overall economic
needs are given top priority.
Collective agreements are negotiated by the
unions with the respective employers’ associations.
Due to the »outsider effect« established
under labor law, all employees are
subject to the collective agreements – regardless
of whether they themselves belong
to the union or not.
The collective agreement has special effects
on the working relationships within the
scope of such agreement. Plant agreements
and employment contracts must comply
with the collective agreement and must
not, on principle, contain any provisions
that would reduce the impact of the collective
agreement. The collective agreement,
among other things, regulates minimum
salaries, work hours and the special remuneration
(holiday and Christmas pay) of
employees. Companies with five or more
employees are required, under Austrian labor
law, to elect a works council that represents
the interests of the employees. Labor
law sets out a number of participatory
rights and rights of information of such
works councils – it goes without saying
that we fully meet all these requirements.
Cooperation also takes place within the
framework of the trade talks that are held
every three months. Here, the Managing
Board informs the works council about the
latest developments in the company.
In accordance with the Corporation Act,
the employees are represented in the supervisory
boards of the stock corporations by
the works council. Accordingly, one-third
of the supervisory boards of Verbund consist
of works council representatives.
ORGANIZATION MANUAL
The rules in the Organization Manual describe
the most important structures and
processes in the group as a whole and in
the individual companies. All employees
have access to the manual via the intranet.
The manual is further developed on an ongoing
basis.
Within Verbund, the rules are subdivided
into three levels:
1. Executive Orders, which apply for the
whole company and which are defined
by the Managing Board. These regulate
the organizational structures, the tasks
of the organizational units, the hierarchical
distribution of competencies and
authority to sign etc.
2. The guidelines are drawn up by the
specialist areas of the holding company
for the entire company or are enforced
by the Managing Board or the managements
of the respective companies.
3. Work instructions, which are enforced
by an organizational unit for its own
field of activity.
The central Executive Order is the allocation
of competencies: it defines the competencies
of the hierarchical levels within the
group for important processes and is available
for the large subsidiaries with specific
modifications.
Another Executive Order regulates the internal
control system. It embraces all the
measures within the corporate organization
that secure existing assets, maintain
production capacity, guarantee the completeness
of all records and promote adherence
to the business policies and
operating efficiency. All managers must
ensure that this obligation is adhered to in
their respective areas of responsibility.
BUDGETING AND MEDIUM-TERM
PLANNING PROCESS
The planning premises for the budget and
medium-term planning are created on the
basis of the strategic goals.
The planning premises for the Verbund
Group are created by group controlling in
cooperation with experts from the holding
and from the relevant operating companies
and presented to the Managing Board for
approval. All of the companies involved in
the planning process are informed with regard
to the standards and premises that are
approved by the Managing Board.
The budgeting and medium-term planning
process is shown in a workflow in the intranet
and can therefore be monitored on
an ongoing basis. The Managing Board receives
regular information on the expected
results and the current budgeting situation.
On completion of the budgeting process,
the budget is presented to the group’s Managing
Board for approval. The budget and
the medium-term planning are presented
to the Supervisory Board together with the
third quarterly report.
RISK MANAGEMENT
Opportunities to enhance corporate value
mostly involve a certain element of risk.
Cross-company risk management has been

installed at Verbund since 2001 to ensure
that these opportunities and risks can be
identified and assessed as early as possible.
At Verbund, risk management is an essential
corporate management tool. It secures
not only the income and financial situation
of the group but also the existing and future
success and growth potential.
Risk management tasks
Risk management is integrated into the organizational
and operational structures of
Verbund. Essential tasks include the exchange
of information on risk-relevant
matters and the further development of
risk management in all areas.
Within Verbund, risk is defined as the possibility
of a positive or negative deviation
from the corporate objectives and ratios.
The systematic risk management process
begins with the regular identification of
risks in the organizational units of the
holding, the subsidiaries and shareholdings.
The individual risks that are
ascertained are prioritized on the basis of a
scoring procedure.
Risks 2007
Focal points this year include the handling
of project risks and the crisis management
activities of the group as well as the enhanced
promotion of risk management in
the shareholdings. The risk assessment
process revealed the following main risks
for 2007:
The main risks are quantified and documented
on an ongoing basis and are aggregated
on a quarterly basis to determine a
corporate risk ratio. Modern risk tools and
the most appropriate valuation methods
(e.g. value at risk, sensitivity analysis, expert
appraisals) are employed.
Correlations derived using Monte Carlo Simulation
are also considered in the aggregation
process. In line with standardized
reporting, the Managing Board is informed
of the results and subsequently reports to
the Supervisory Board on the five most significant
risks. The calculated deviation lies
within a maximum range of +12 % (best
case) and –19 % (worst case) from the tar-
geted group earnings for 2007. The confidence
level is 95 %.
The transparent risk reporting system
serves as an early-warning system for Verbund
and creates a basis for the introduction
and early execution of targeted control
measures not only for risk management
and limitation but also for opportunity
evaluation.
In 2006, a number of consulting companies
named Verbund as being a best-practice
company on account of the high quality
of the risk management system. To promote
continuous improvement, Verbund
also exchanges experience with other energy
companies at an international level. Risk
manuals and guidelines have been drawn
up to create and secure the risk culture in
Verbund. Training and workshops are carried
out on a regular basis.
The risk situation for the Verbund Group
did not change significantly in the period
under review. As of 31 December 2006, no
risks have been identified for fiscal 2007
which, either individually or in connection
with other risks, could have a substanceendangering
effect. Within the framework
of reporting in accordance with Point 80 of
the Austrian Corporate Governance Code,
the functionality of the risk management
system was evaluated by auditors and
found to be appropriate.
Generation
Line organization
Generation
New business/
Interests
Holding
Model - Strategy - Objectives
Sustainability management
Research and environmental management
Line organization
New business/
Interests
Risk management
Trade/
Distribution
Safety management
Project management
Line organization
Trade/Distribution
GROUP AUDITING/
INTERNAL AUDITING
Group/Internal Auditing is a staff unit that
reports directly to the Managing Board.
The unit operates on the basis of an auditing
program which is approved by the Managing
Board on an annual basis. The unit
is responsible for the auditing of economic
efficiency, regularity and security in all Verbund
companies.
Group/Internal Auditing has the task of
providing independent and objective
auditing and consulting services which aim
at safeguarding group assets, creating
added value and optimizing the business
processes.
It employs a systematic and risk-oriented
auditing approach to assess the effectiveness
and efficiency of the internal control
system as well as the management and
leadership process and provides active support
in optimizing these processes.
The reliability, usefulness, completeness
and economic efficiency of this system
shall also be audited together with criteria
such as target setting, target achievement
and the regulation of responsibilities.
Here, the contribution to value creation is
made through the identification of possibilities
to improve the auditing and con-
Transmission
Line organization
Transmission
Services
Group-wide
management systems
Line organization
Services
73

74
sulting activities, and/or possibilities to reduce
risks and provide active support for
the company in achieving the defined targets.
A standardized follow-up audit by Group
Auditing ensures that the recommendations
of the Managing Board are actually
being implemented.
SUSTAINABILITY MANAGEMENT
In 2002, the Verbund Managing Board decided
to focus even more closely on the
principles of sustainability and document
the group’s activities in an annual Sustainability
Report. Top responsibility for sustainability
lies with the group’s Managing
Board which defines the sustainability
goals and policies. The Sustainability
Board, which is in charge of preparing the
decision-making process, reports directly
to the Managing Board.
The group is widely represented on the
Sustainability Board by the management
assistants of the Holding company and the
representatives of the subsidiaries AHP,
ATP, APT and APG, the leader of the business
division Participating Interests, the
leader of group communications, the
investor-relations manager and the officers
in charge of sustainability.
At least one member of the Sustainability
Board must also be a member of the Strategy
Team to ensure that the strategy goals
are consistent with the goals that have been
defined for the promotion of sustainability.
The Sustainability Board is responsible for
defining the goals and focal points in the
area of sustainability, passing on fresh impetus
from the subsidiaries to the Sustainability
Committee, conveying the principles
of sustainability to the executives and the
employees of the subsidiaries they represent
and approving the basic concept for
the publications.
The Sustainability Committee is the working
group of the Sustainability Board. It
coordinates the implementation of the sustainability
activities and prepares the Sustainability
Report.
The Sustainability Officer of the group
chairs the Sustainability Committee which
comprises experts for social affairs, the environment,
the economy, research and
communications as well as an employee representative.
Each consolidated participating
company of the group is represented by
a member of the Sustainability Committee.
The Sustainability Committee proposes
definite goals and measures to promote
sustainability within the group, reports on
the implementation of the sustainability
projects in the companies and creates the
Sustainability Report.
RESEARCH AND ENVIRONMENTAL
MANAGEMENT
Verbund has also implemented a management
system for the research and environment
areas. This system focuses on the research
agenda as well as on the environment
agenda and plays a decisive role in
promoting application-oriented research
and improving activities that are designed
to protect the environment on an ongoing
basis.
The management system regulates the
coordination, control and realization of
methods and projects in both areas.
In its managing role, the Management
Board on Research and Environment,
which comprises the managing boards and
managers of the operating companies that
have been nominated to handle research
and environmental issues, defines the fundamental
strategies of Verbund’s research
and environmental policies. The activities
for the implementation of the environmental
goals and the efficient implementation
of the projects that are relevant for research
and development throughout the
group are discussed at regular meetings
and closely monitored.
The Research and Environmental Committee,
which is made up of the research and
environment officers in the operating companies,
the sustainability officer and one
employee of group communications, supports
the Management Board on Research
and Environment and handles the preparatory
work. This working group commissions,
processes and controls the implementation
of current research activities and environmental
measures.
The coordination and harmonization of all
research and environmental activities within
the group takes place at VERBUND-
Austrian Hydro Power AG (AHP).
The environment and research officers in
the operating companies are responsible
for the control and implementation of the
activities in the respective companies. They
coordinate the processing of the projects,
ensure that the environmental goals are adhered
to and deal with internal and external
questions relating to research and environmental
issues. The Environmental
Management System also embraces trained
environment officers in the individual
plant and grid groups who ensure that all
of the relevant environmental requirements
are met and adhered to. The environment
officers are also responsible for
the implementation of the defined environmental
goals and auditing.
MANAGEMENT SYSTEM FOR
PERSONNEL DEVELOPMENT/
TRAINING AND FURTHER EDUCATION
Personnel development/training and further
education report directly to the Managing
Board of the group. The strategic
guidelines are drawn up in the holding area
»Strategic Personnel Management«. Operative
control is effected via a specialist
group within this area in close cooperation
with external experts. The individual measures
are agreed on after consultation with
the individual group companies and are
stated in the education budget. This, in
turn, appears in the group budget and is
then approved by the appropriate body.
SAFETY MANAGEMENT IN VERBUND
Tasks relating to workplace safety and
safety engineering within the group are
handled by highly experienced safety experts.
These experts are responsible for

safety in the plant and personnel areas. The
plant area embraces all run-of-river and
storage power plants, the thermal power
plants and the high-voltage grid. Added to
this are the subsidiaries with technical, administrative
and tourism-related tasks. The
personnel area includes all executives, employees,
safety officers and employee associations
in the areas of workplace safety,
safety engineering, waste management and
environmental protection.
Central tasks include:
o Counselling of executives and other
employees responsible for workplace
safety with regard to adherence to the
statutory workplace safety requirements
and the provision of support in
the implementation of new laws, regulations
and binding standards as well as
the creation of concepts and binding
guidelines that are relevant for safety.
o Cooperation with the industrial medical
experts, the safety officers and staff
representatives as well as external experts
such as representatives of labor
inspectorates, the Austrian Workers’
Compensation Board, fire brigades etc.
o Execution of the duties of the safety
experts.
o Provision of technical safety support
during commissioning and construction
work, creation of the necessary
documentation, ongoing adjustment
and improvement of accident prevention
measures.
o Administration of group-wide safety
competition, employees with no selfcaused
accidents receive an annual
bonus.
o Know-how maintenance and further
training in the relevant specialist areas,
in particular, the areas of fall, electro,
fire, explosion and noise protection,
work material assessment, hazardous
material management, waste management,
skin protection, avalanche protection,
work psychology, legal
amendments etc.
o Assumption of representative functions
in the areas of fire protection, radiation
protection, waste management, handling
and transport of hazardous materials.
o Engagement in employee information
and instruction measures including the
creation and maintenance of the required
documentation, carrying out of
plant inspections and safety-relevant
measurements, assistance in the creation
of publications and reports extending
to the evaluation of draft legislation
and involvement in expert committees
responsible for technical safety.
Nine regional workplace safety committees,
two central workplace safety
committees and a higher-ranking, centralized
workplace safety committee,
which is responsible for the entire
group, have been installed to ensure
that all statutory regulations are complied
with. The members of the regional
committees are selected over and
above the statutory requirements in
that all locations, employees and activities
are considered. The workplace
safety committees must ensure that information
and experience are exchanged
in an appropriate manner.
They are also responsible for the coordination
of the operational workplace
safety mechanisms and must work towards
improvement in the areas of
safety, health protection and working
conditions. Moreover, these committees
must advise on all safety and health
protection issues, working conditionrelated
health promotion and humane
job structuring.
INDUSTRIAL MEDICINE
By definition and in line with the legal requirements,
industrial medicine is dedicated,
first and foremost, to the prevention of
workplace-related illnesses and secondly, to
the treatment of such illnesses. Within the
group, these tasks are handled at medical
centers and by independent occupational
health specialists. The duties of the occupational
health specialists are regulated in the
new guideline »Organization of the Works
Physician Service«. The complete spectrum
of industrial medical care was offered in
the period under review and hence, all the
statutory requirements were met. The industrial
medical care activities included:
o Vaccinations: influenza, FSME, diphtheria/tetanus,
hepatitis A+B and polio.
EDP equipment was used in the recording
and maintenance of vaccination
data
o First Aid courses: the legally required
first aid courses, both full courses and
refresher courses, were held in the year
under review
o First-aid services on-site
o Physical examinations, suitability tests
and screening tests
o Involvement in crisis team on the
theme of »influenza pandemic«
o Visits to and inspection of work places
o Cooperation with works council
o Practice at Head Office Vienna
75

76
PRIMARY GOALS
Goal Sub-goal Starting point 2005 Target 2006
Further integration of sustainability concept Firm internal implementation Lectures held in two power plant groups
in the company of sustainability and event in training program
Integration of sustainability Sustainability is integrated into project
in project management application
Appointment of Compliance Officer Revised mission statement – Compliance Officer now appointed,
vision, mission, strategy and competencies and processes have been
Code of Conduct – exists determined
Presentation of company’s quantitative Creation of an indicator system Individual indicators for economy, Integrated indicator system now exists
sustainability indicators environment and social issues exist
Operationalization of Code of Conduct Evaluation of content of Code of Create guideline One Guideline completed
Conduct, priority list
Monitoring of suppliers with Work in progress on supplier Evaluation system created and
regard to ethics and environment evaluation system in use
Implementation of sustainability
aspects in proposed investments
abroad
New indicators acc. to G3 guideline Creation of a cadaster of plants in
or on the border of natural parks
and nature reserves
ECONOMY
Goal Sub-goal Starting point 2005 Target 2006
Achievement of Operating result 526.5 million
economic goals
Earnings per share 1 1.13
Economic Value Added (EVA) 201.8 million
Net gearing 2 97.4 %
Investment in repair and 117.7 million
maintenance measures
Utilization of growth Value-creating investments and Acquisition of 25 % share in
opportunities in the European acquisitions POWEO and 45 % in EKG
electricity market
Expansion of hydropower utilization Construction of storage power plant Start of construction Construction continued on schedule
Gerlos II January 2005
Construction of pumped storage Preliminary project completed Construction decision
power plant Limberg II
Construction of run-of-river power Evaluation study completed Construction decision
plant Werfen/Pfarrwerfen
Increase thermal generation Renovation of old power plants EIA for gas-steam plant Positive EIA decision and construction
capacity Mellach/Werndorf is decision of Supervisory Board received,
submitted start of construction
Upkeeping of security of Construction of 380 kV line Positive decision in Positive decision in 2 nd instance and
supply and reduction of Kainachtal-South Burgenland 1 st instance received construction decision of Supervisory
grid losses Board received
Construction of 380 kV line EIA submitted in Salzburg Construction decision of Supervisory
Salzach Neu – St. Peter, and Upper Austria Board received
Creation of EIA
Increase share of renewable energies in Implementation of competence area
generation mix for renewable energies
1 Following the stock split in the ratio of 1 : 10 on 23 May 2006, the previous year’s figures were restated
2 Shareholders’ equity after reclassification of other long-term capital provided by partners

Achieved 2006 Status Planned measures for 2007 Target 2007
Target achieved: lectures held in continue Hold lectures in two power plant groups Lectures were held in two power
three power-plant groups plant groups
Target achieved: sustainability completed
integrated in project application
Target partly achieved: continue Define competences and processes for Competence allocation exists for
Compliance Officer is appointed Compliance Officer Compliance Officer
Target achieved: involvement in G3 continue Further develop indicator system on Expanded indicators are available
guidelines and sector supplements basis of G3 and sector supplements
Target partly achieved: guideline »Anti- continue Create guideline »Anti-corruption Guideline »Anti-corruption and bribery«
corruption and bribery« being drawn up and bribery« is created
Target achieved: evaluation system for completed
A-suppliers, who have a share of 70 % in
the purchasing volume, was introduced
new Develop criteria on human rights and Criteria catalogue is created
environmental aspects in area of foreign
investment
new Decision application in AHP area Decision to create a cadaster for plants in or on
the border of national parks and nature reserves
has been made
Achieved 2006 Status Planned measures for 2007 Target 2007
806.5 million continue
1.63 continue
346.4 million continue
74.1 % continue
201.2 million continue
Target achieved continue Process target markets Germany, France, Italy,
Slovenia, Hungary and Greece
Target partly achieved: delay in continue Complete construction work Commissioning of power plant
generator production
Target achieved: continue Continue construction work Development work is completed
construction decision on 20.02.2006
Target achieved: continue Continue construction work Fist concrete is laid
construction decision on 21.08.2006
Target partly achieved: positive EIA continue Carry out EIA process in 2 nd instance Positive EIA decision in 2 nd instance and
decision in 1 st instance Supervisory Board decision received, project
order placed
Approval process in 2 nd instance continue Commencement of construction after Positive decision in 2 nd instance and
ongoing positive decision in the 2 nd instance construction decision of Supervisory Board
received, start of construction
Target not achieved as EIA continue Complete approval process Construction decision received from Supervisory
process is not yet completed Board
new Create concept Concept »Renewable energies in Verbund«
has been created
77

78
ENVIRONMENT AND RESEARCH
Target Sub-goal Starting point 2005 Target 2006
Avoidance of negative environmental Enhance energy efficiency in the Aschach power plant: Work on first machine unit in
influences with power plants and grid facilities area of electricity generation replacement of 4 th master progress
machine, increase SC by
45 GWh by 2010
Reduction of environmental influences through Implementation of EU Water Study on possible effects of Concept for guaranteeing generation
power plants Framework Directive EU-WFD completed security partly completed
(EU-WFD)
Fish ladder at Laufnitzdorf power 50 % of construction work is Commissioning in June 2006
plant completed
Fish ladder at Melk power plant Planning is complete Construction measures
completed to 66 %
Fish ladder at Villach power plant
Fish ladder at Spielfeld power plant
Improve/secure terrestrial and Expansion of Brenndorf shallow water Existing shallow water zones Design measures in progress
aquatic habitat zones at Edling power plant approved by authorities
Feistritz-Ludmannsdorf power Flood protection and design 150,000 m 3 initial channel dredging
plant: implementation of flood and measures have started and 75,000 m 2 shallow water zone
sediment management by 2010 development now complete
Paternion power plant: structural 7 silted up shallow water zones 7 shallow water zones reactivated,
improvement in Drau reservoir biodiversity increased
Drau power plant group: Preparatory work is completed Study was presented
river area management
Certification in accordance First certification and monitoring 58 power plants and grid regions 66 locations certified in acc. with
with EMAS and ISO 14001 audits for certified locations are certified in acc. with ISO ISO 14001, 35 also with EMAS
14001, of these, 27 also have
EMAS certification
Lower Danube power plant group: 4 locations are certified 5 locations are certified
one further plant with Environmental
Management System each year
Drau power plant group: 3 further 7 locations are certified 10 locations are certified
power plants with EMS
Kaprun/Salzach power plant group: 3 locations are certified 7 locations are certified
4 further power plants with EMS
Upper Danube power plant group:
one further plant with EMS each year
Certification of Malta power plant group
in acc. with ISO 14001 and EMAS
Introduction of EMS in Grid Group West Positive audit of Grid Group West in
acc. with ISO 14001, EMAS and
SGM OHSAS 18001 completed
Certification of location
1010 Vienna, Am Hof 6a in acc.
with ISO 14001 and EMAS
SOCIAL ISSUES
Target Sub-goal Starting point 2005 Target 2006
Improvement of work-life balance Provision of childcare places for No kindergarten places Feasibility study carried out
female employees available
Introduction of systematic Commitment Index, Concept exists Implementation plan created
employee interviews first initiation by end of 2005
Achievement of social targets Increase share of women 15 % 16 %
Increase customer safety when Sensitize end customer
handling the product electricity to this issue
Reduction of accident rate in 21.4 (after new calculation < 20 (corresponds to approx. 18.5)
the group 2006: 19.8)
Space per employee

Achieved 2006 Status Planned measures for 2007 Target 2007
Target achieved continue Continue work on 2 nd machine unit, Work on 1 st machine unit is completed and
Complete work on 1 st machine unit work on 2 nd machine unit is in progress
Target achieved continue Create further parts of the concept Further parts of the concept have
been created
(conclusion 2012)
Target achieved completed
Target achieved continue Complete construction work Fish ladder Melk is completed
new Build fish ladder Fish ladder Villach is completed
new Build fish ladder Fish ladder at Spielfeld is completed
Target changed: concept for unbundling continue Create concept Concept for unbundling of utilization
of utilization to be created has been drawn up
Target achieved: dredging completed continue Create shallow water zones Shallow water zones Dragositschach
and shallow water zones created Dragositschach and Selkach and Selkach are almost completed
Target achieved completed
Target partly achieved continue Complete study »River Management« study is completed in
spring 2007
Target achieved: 67 locations certified continue 4 further locations certified in acc. with 71 locations certified in acc. with ISO
in acc. with ISO 14001, of these 36 ISO 14001 and EMAS (1 Danube and 14001, of these 40 also with EMAS
also with EMAS certification 1 Drau power plant, 2 grid locations) certification
Target achieved completed
Target achieved completed
Target achieved completed
new Implement EMS at one location EMS is implemented at Wallsee-Mitterkirchen
power plant
new Certify power plant group EMS is implemented at Malta power plant
Target achieved continue Expand EMS at grid regions North and East Positive audit of grid regions North and East in
acc. with ISO 14001, EMAS and SGM OHSAS
18001 completed
new Carry out data acquisition Data acquisition is completed
Achieved 2006 Status Planned measures for 2007 Target 2007
Target achieved: feasibility study continue Submit decision application to Managing Board Decision received from Managing Board with
completed regard to childcare places
Target achieved continue Carry out pilot project Pilot project is completed
Target partly achieved: 15.7 % continue Young Professional Program, Daughter’s 17 %
Day, »Female Technician Campaign« in
personnel recruitment
Target achieved: 15.4 continue Implement devised measures Hold value under 16
(value after new calculation 2006)
new Determine space requirements Room concept exists for Head Office in
1010 Vienna
new Publish information via End customers are sensitized to safety
newsletter and internet issues
79

80
AUDITOR’S CERTIFICATE
ETA Umweltmanagement GmbH, Sustainability
Auditors, was commissioned
o to evaluate the Sustainability Report
2006 on the basis of the underlying data,
systems and procedures;
o to check that the published data is correct
and that it reflects the performance
of Verbund in a comprehensive manner;
o to critically analyze the scope, balance
and interpretation of the information
presented and
o to certify the Sustainability Report.
We have based our audit on the developing
standards for sustainability report auditing.
These are: the AA1000 Assurance Standard
(AA1000), published by Accountability,
the guiding principles of the European
Federation of Accountants »Providing
Assurance on Sustainability Reports« and
the auditing criteria of the Global Reporting
Initiative (GRI application levels for
version G3).
Our audit embraced:
o an interview with those responsible for
the data and information in the Sustainability
Report as well as random
testing of the underlying management
systems and procedures,
o an evaluation of the correct, balanced
and consistent portrayal of the sustainability
aspects and data as well as
o an analysis of the systems employed
for data acquisition and the evaluation
of the performance ratios in the economic,
social and environmental areas.
In our assessment, the data and information
in the Sustainability Report is comprehensive,
balanced and presented in an appropriate
manner with regard to ecologi-
cal, social and economic aspects of sustainability
and is not in conflict with other information
or evidence furnished by the
company. Detailed recommendations for
the further development of the sustainability
area were submitted to the management
in an internal report.
Dr. Christine Jasch
Chief Auditor, Chartered Certified Accountant
Dr. Stefan Gara
Chief Auditor, Manager
ETA Umweltmanagement GmbH
Sustainability Auditors
Gusshausstr. 21/19, 1040 Vienna Austria
Tel. +43 (0)1/503 72 08-0
office@eta.at, www.eta.at
Register number: AT-V-0001
ETA is an Organizational Stakeholder (OS)
of the Global Reporting Initiative (GRI)
and supports the mission of GRI.
This Sustainability Report meets the requirements of GRI
G3 application level A+.

GROUP STRUCTURE
VERBUND
GENERATION
TRADING
SALES
TRANSMISSION
PARTICIPATING
INTERESTS
Österreichische Elektrizitätswirtschafts-Aktiengesellschaft (Verbundgesellschaft)
VERBUND-
Austrian Hydro Power AG
AHP
VERBUND-
Austrian Thermal Power GmbH & Co KG
ATP
VERBUND-
Austrian Power Trading AG
APT
VERBUND-
Austrian Power Sales GmbH
APS
VERBUND-
Austrian Power Grid AG
APG
VERBUND-
BeteiligungsgmbH
VBG
Environmentally friendly and
cost-effective generation forms
the basis for the success of Verbund
all over Europe. Approx. 90 % of
the electricity produced by Verbund
is generated from hydropower.
The thermal subsidiaries supply
important complementary energy.
With subsidiaries in seven member
states of the EU, Verbund is one of
the most expansive and most successful
electricity traders in Europe.
Since June 2005, Verbund has also
been very actively involved in direct
distribution to end customers in
Austria.
Verbund operates the supra-regional
high-voltage grid which transports
approx. 50 % of the total volume
of electricity consumed in Austria.
Moreover, with its connections to
the international grid, Verbund is
an important switching location
within the framework of European
electricity transmission.
Verbund holds numerous shareholdings
in Austria and abroad.
Energy is a core business area
for most of the companies in the
Verbund portfolio. These successful
companies make growing
contributions to earnings within
the group.

GLOSSARY
Bottleneck The bottleneck capacity is the highest active power that, on the assumption that the required energy sources (water, fuel, etc.)
capacity are available, a power plant can sustain permanently
E-Control Energie-Control GmbH is responsible for monitoring, supervising and, if necessary, regulating the implementation
of the liberalization of the Austrian electricity and gas market (www.e-control.at)
Eco-electricity Electricity generated from renewable, non-fossil energy sources in compliance with the definition in the Eco-Electricity Act,
e.g. wind, sun, hydropower, biomass, natural heat of the earth, etc.
Efficiency Ratio between energy output and energy input at a certain point in time
EMAS Eco-Management and Audit Scheme: EU decree on voluntary participation of commercial enterprises in a community system
for environmental management and environmental audits
EU Water The EU WFD stipulates that all member states must ensure that all running waters, lakes and groundwaters have a good
Framework ecological, chemical and quantitative status by 2015
Directive
International The International Energy Agency (IEA) is a platform for various cooperations, above all in the areas of research,
Energy Agency development, market introduction and energy technology application (www.iea.org)
ISO 9001 An international set of standards relating to quality management
ISO 14001 International standard that refers to environmental management systems
ISO/IEC 27001 An international set of standards relating to information safety management
OHSAS 18001 Occupational Health and Safety Assessment Series, industry-independent standard for a workplace safety management system
PLATTS Worldwide supplier of information on metals and energy as well as reference prices (www.platts.com)
Standard Standard capacity is the electrical energy that can be generated during a normal year, put in relation to the generator
capacity terminals, excluding generation from pumped storage. The normal year is a fictitious year – its energy data is computed
from averages of a long (as long as possible) series of consecutive years.
Substitute fuels Substitute fuels are non-conventional fuels, with conventional fuels being classified as coal, fuel oil, natural gas and biomass,
under the Clean Air Act
UCTE Union for the Co-ordination of Transmission of Electricity (www.ucte.org)
VEÖ Austrian Association of Electricity Utilities (www.veoe.at)
WIFO Austrian Institute for Economic Research (www.wifo.ac.at)

CERTIFIED POWER PLANTS OF VERBUND
IMPRINT
Run-of-river plant of AHP
Storage power plant of AHP
Joint-venture power plant of AHP
CZ
Participating interest of Verbund
Jochenstein
Power plant of AHP under construction
Thermal power plant of ATP
Thermal power plant of ATP out of commission or leased
Passau-Ingling
Schärding-Neuhaus
Egglfing-Obernberg
Ering-Frauenstein
Aschach
Ottensheim-Wilhering
Abwinden-Asten
St. Pantaleon
Altenwörth
Greifenstein
Korneuburg
Environmental Management System in acc. with EMAS and ISO 14001
Environmental Management System in acc. with ISO 14001
Braunau-Simbach
Mühlrading
Staning
Wallsee-Mitterk. Melk
Nußdorf
Dürnrohr
Freudenau
AHP
ATP
VERBUND - Austrian Hydro Power AG
VERBUND - Austrian Thermal Power GmbH & Co KG
D
Nußdorf
Garsten-St. Ulrich
Rosenau
Ternberg
Klaus
Losenstei n Ybbs-Persenbeug
Großramin g
Weyer
Schönau
Altenmarkt
Landl
Oberaufdorf-Ebbs Werfen/Pfarrwerfen
Salza Krippau
Dionysen
Funsingau
Gerlos II
Gerlos
Bischofshofen
St. Johann
Schwarzach
Kreuzbergmaut Sölk
Hieflau
Urreiting
Triebenbach Leoben
Zeltweg
Pernegg
Laufnitzdorf
Rabenstein
CH
Mayrhofen
Bösdornau
Roßhag
St. Veit Mandling
Limberg II
Wallnerau
Häusling
Kaprun- Bodendorf-Paal
Kaprun- Hauptstufe
Oberstufe
Reißeck-Kreuzeck Malta-Oberstufe
Malta-Hauptstufe
DRAU Malta-Unterstufe
Fisching
Peggau
Graz
St. Georgen Friesach
Weinzödl
Voitsberg Neudorf-W erndorf 2
Neudorf-W erndorf 1
Mellach
Bodendorf-Mur
Mellach
St. Martin Lebring
Arnstein
Gralla
St. Andrä
Gabersdorf
Obervogau
I
Paternion
Kellerberg
Villach
Lavamünd
Schwabeck
Spielfeld
5 0 10 20 3040
50km
Rosegg-St. Jakob
Feistritz-Ludmannsdorf
Edling
PUBLISHED BY
Österreichische Elektrizitätswirtschafts-Aktiengesellschaft
(Verbundgesellschaft)
A-1010 Vienna
Am Hof 6a
Tel. +43-(0)503 13-0
Fax +43-(0)503 13-54 191
SUSTAINABILITY COORDINATOR IN VERBUND
Mag. Renate Pretscher, E-mail: sustain@verbund.at
EDITED BY
Mag. Karin Kichler, E-mail: sustain@verbund.at
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Annabrücke
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DESIGN
aha puttner red cell, Werbeagentur
PHOTOS
Archiv Verbund, R. Fehringer,
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